Question 1 - Pena Corporation incurrerd the following costs while manufacturing its product.
Materials used in product $100,000.00
Depreciation on plant $60,000.00
Property taxes on store $7,500.00
Labor costs of assembly-line workers 110,000.00
Factory supplies used $23,000.00
Advertising expense $45,000.00
Property taxes on plant $14,000.00
Delivery expense $21,000.00
Sales commissions $35,000.00
Salaries paid to sales clerks $50,000.00
Work in process inventory was $12,000 at January 1 and $15,500 at December 31.
Finish goods inventory was $60,000 at January 1 and $55,600 at December 31.
Instructions:
A- Compute cost of goods manufactured.
B- Compute cost of goods sold.
Question 2 - Corbin Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $305,000 for the year, and machine usage is estimated at 125,000 hours.
For the year, $322,000 of overhead costs are incurred and 130,000 hours are used.
Instructions:
A- Compute the manufacturing overhead rate for the year.
B- What is the amount of under- or overapplied overhead at December 31?
C- Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.