Question :
You are asked to bring the subsequent incomplete accounts of one of Plentiful Printing's printing plants up to date through 31st January, 1992. Also consider the data that given below.
Materials (12/31/91 Balance) $15,000
Factory Department Overhead (total January charges) $57,000
Finished Goods (12/31/91 Balance) $20,000
Additional Information:
1. The overhead is applied using a budgeted rate that is set every December by forecasting the subsequent year's overhead and relating it to forecast direct labor costs. The budget for 1992 called for $400,000 of direct labor and $600,000 of factory overhead.
2. The only job unfinished on 31st January, 1992, was No. 419, on which net production costs were $13,000 (direct labor cost of $2,000 --125 direct labor hours--, direct materials cost of $8,000, and manufacturing overhead costs of $3,000).
3. Total materials placed into production in January were $90,000.
4. Cost of goods manufactured in January was $180,000.
5. Materials inventory as of 31st January was $20,000.
6. Finished goods inventory as of 31st January was $15,000.
7. All factory workers earn the same rate of pay. Direct labor hours for January totaled 2,500.
8. Sales during January of $285,000 were made.
9. Selling costs of $57,000 and administrative costs of $12,000 were incurred during January.
10. Materiality threshold for over/ under applied overhead is $6,500
Required:
1) Materials purchased through January
2) Cost of Goods Sold through January
3) Overhead applied through January
4) Underapplied and Overapplied overhead for January (you have to tell me both the amount and whether it is over or under for credit)