The Pacific Manufacturing Company operates a job order costing system and applies overhead cost to the jobs on the basis of direct labor costs.
The Pacific Manufacturing Company operates a job order costing system and applies overhead cost to the jobs on the basis of direct labor costs.
Its predetermined overhead rate was bases on a cost formula that estimated $126,000 of manufactured overhead for an estimated allocation base of $84,000 direct labor cost. The company has provided the following data in the form of excel Worksheet:
- Beginning Ending
- Raw material $21,000 $16,000
- Work in process $44,000 $40,000
- Finished Goods $68,000 $60,000
- The following actual costs were occurred during the year:
- Purchase of raw material (direct) $133,000
- Direct labor cost $80,000
- Manufacturing overhead Costs:
- Insurance Factory $7,000
- Depreciation Equipment $18,000
- Indirect Labor $42,000
- Property taxes $9,000
- Maintenance $11,000
- Rent building $38,000
Required:
1-
A-Compute the predetermined overhead rate for the year.
B-Compute the amount of under applied or Overapplied for the year.
2- Prepare a Schedule of cost of goods manufactured for the year. Assume all raw material used in production as direct materials.
3- Compute the unadjusted cost of goods sold for the year.(Do not include any underapplied or overappliead overhead in your cost of goods sold figure) what options are available for disposting of underapplied or overapplied overhead?
4- Job 137 was started and completed during year. What price would have been charged to the customers if Job required $3,200 in a material and $4,200 in a direct labor cost and the company priced its Job at 40%above the job costs according to the accounting system?
5- Direct labor made up $8,000 of the $40,000 ending work in process inventory balance. Supply the information missing below:
Direct Material $?
Direct Labor $8,000
Manufacturing overhead $?
Work in process inventory $40,000