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Question: problem 325 schedule of cost of goods manufactured overhead analysis...

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Problem 3-25 Schedule of Cost of Goods Manufactured; Overhead Analysis [LO3-1, LO3-2, LO3-3, LO3-6, LO3-7]

Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $109,200 of manufacturing overhead for an estimated allocation base of $91,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:

  

  
  Purchase of raw materials $ 130,000
  Direct labor cost $ 87,000
  Manufacturing overhead costs:
     Indirect labor $ 92,100
     Property taxes $ 9,000
     Depreciation of equipment $ 15,000
     Maintenance $ 11,000
     Insurance $ 8,000
     Rent, building $ 34,000

  

  Beginning Ending
  Raw Materials $ 22,000 $ 14,000
  Work in Process $ 44,000 $ 35,000
  Finished Goods $ 69,000 $ 62,000

  

Required:
1-a.

Compute the predetermined overhead rate for the year.

       

1-b.

Compute the amount of underapplied or overapplied overhead for the year.

       

2.

Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.

       

3-a.

Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)

       

3-b.

Identify the options available for disposing of underapplied or overapplied overhead? (Select all that apply.)

  

4.

Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $3,400 in direct materials and $4,900 in direct labor cost and the company priced its jobs at 45% above the job’s cost according to the accounting system?

       

5.

Direct materials made up $8,500 of the $35,000 ending Work in Process inventory balance. Supply the information missing below:

       

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