How much is direct labor cost and manufacturing overhead

Assignment Help Managerial Accounting

Reference no: EM132791255

Question 1 - Almeda Products, Inc. uses a job order costing system. Inventory balances on April 1 were raw materials, $32,000; work in process, $20,000; and finished goods, $48.000

Additional information are as follows:

a. Raw materials purchased $170,000.

b. Raw materials issued from storeroom to production $180,000; 80% direct and 20% indirect.

c. Direct labor $200,000; indirect labor $82,000; and selling and administrative salaries $90,000.

d. Utility costs incurred in the factory, $65,000. Advertising costs $100,000

e. Insurance Expense $20,000; 90% factory related and 10% selling and administrative related.

f. Depreciation Expense $180,000; 85% for factory assets and 15% for selling and administrative assets

g. Predetermined overhead rate is 175% of direct labor cost. Cost of goods manufactured was $700,000

h. Sales for the year, $1,000,000; cost of the goods sold, $720,000.

Required -

1. Compute for the under- or over-applied overhead for the year. Is it under-applied or over-applied?

2. Compute for the ending balance of raw materials, work in process and finished goods.

3. The company under- or over-applied overhead to cost of goods sold. Prepare an income statement.

Question 2 - Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased.) In computing a predetermined overhead rate at the beginning of the year, the company's estimates were: manufacturing overhead cost, $800,000; and direct materials to be used in production, $500,000. The company has provided the following data:

Beginning Ending

Raw materials $20,000 $80,000

Work in Process 150,000 70,000

Finished Goods 260,000 400,000

The following actual costs were incurred during the year:

Purchase of direct raw materials $510,000

Direct labor cost 90,000

Manufacturing overhead costs:

Indirect labor 170,000

Property taxes 48,000

Depreciation- equipment 260,000

Maintenance 95,000

Insurance 7,000

Rent - Building 180,000

Required -

1. a. Compute the predetermined overhead rate for the year

b. Compute the amount of under- or over-applied overhead for the year.

1. Prepare the statement of cost of goods manufactured for the year.

2. Compute the Cost of Goods Sold for the year. (Do not include the under- or over-applied overhead in the cost of goods sold.) What options are available for disposing of under- or over-applied overhead?

3. Job 215 was started and completed during the year. What price would have been charged to customer if the job required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25% above the job's cost to absorb period cost as well as provide for profit?

4. If direct materials made up $24,000 of the ending work in process inventory balance. How much is the direct labor cost and the manufacturing overhead?

Reference no: EM132791255

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