Reference no: EM132815184

Question - New York Injection Moulding operates a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. In computing an overhead rate for the year, the company's estimates were as follows: manufacturing overhead cost, $238,000, and machine-hours, 30,000. The company has provided the data in the following table:

Beginning Ending

Raw Materials $24,000 $16,000

Work in Process $48,000 $43,000

Finished Goods $72,000 $63,000

The following actual costs were incurred during the year:

Purchase of raw materials (all direct) $138,000

Direct labour $90,000

Machine-hours 45,000

Manufacturing overhead costs $255,000

Required -

1. Compute the predetermined overhead rate for the year.

2. Compute the amount of underapplied or overapplied overhead for the year. How is overapplied (underapplied) overhead disposed of at year-end?

3. Create a schedule of cost of goods manufactured for the year.

4. Compute the cost of goods sold for the year.

5. Job 137 was started and completed during the year. What price would have been charged to the customer if the job required $3,400 in materials, $4,000 in direct labour cost, and required 380 machine-hours to complete? Assume the company prices its jobs at 40% above the job's cost according to the accounting system.

6. Direct labour made up $7,000 of the $43,000 ending Work in Process inventory balance. A total of 2,050 machine-hours had been applied to the incomplete units of product included in Work in Process inventory at year-end. Supply the information missing below.