Determine the cost of goods manufactured for the year

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Reference no: EM132502487

Sonia Company Estimates and Actual Costs

 

Estimate

Actual

Direct materials used

$1,400.000

$1,500,000

Direct labor

1,000,000

1,050,000

Indirect labor

400.000

375,000

Factory insurance

25,000

25.000

Factory maintenance

100,000

50,000

Factory rent

575.000

550,000

Factory equipment depreciation

100,000

100.000

  • Work-in-process inventory is $0 at 1/1/16 and $70,000 at 12/31/16. Finished goods inventory is $80,000 at 1/1/16 and $65,000 at 12/31/16.

Question 1: Would Sonia use job order costing or process costing? Why? Sonia uses a predetermined overhead rate based on direct labor costs. What is the predetermined overhead rate for the current year?

Question 2: Compute the amount of under- or over-applied overhead for the year.

Question 3: Determine the cost of goods manufactured for the year.

Reference no: EM132502487

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