The Data Archives Company produces digital media as well as prints of high end fine art for galleries, artists, and collectors using digital photography, scanners, and other imaging systems. The following data reflect information for the fiscal year just ended:
Selected budget information:
Direct labor hours 10,000
Direct labor hourly rate $12
Indirect production costs $240,000
Actual costs incurred:
Direct materials purchased 120,000
Direct manufacturing labor costs 96,000
Indirect labor 60,000
Depreciation, production equipment 24,000
Depreciation, office equipment 8,000
Maintenance, production equipment 21,000
Miscellaneous factory overhead 11,000
Rent, Factory builing 84,000
Advertising expense 120,000
Sales commissions (5% of sales) 45,000
Inventory Balances at January 1 and December 31:
Direct Materials 10,000 13,000
Work-In-Process 5,000 20,000
Finished Goods 70,000 40,000
Assume that a Normal Job Costing system is used and that indirect production costs are allocated based on direct labor dollars. The company uses the proration appraoch applied against ending balances to account for over or under absorbed indirect production costs, regardless of materiality.
1. The allocation rate for indirect production costs is:
2. The indirect cost allocated to work-in-process is:
3. The uner or (over) applied overhead is:
4. The cost of direct materials used is:
5. The cost of goods manufactured is:
6. The amount of cost of goods sold, after proration of under or over applied indirect production costs is: