Reference no: EM13788116

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: