Reference no: EM131792025

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.