Reference no: EM132972705

Pauline's Printers Inc. creates custom print work such as wedding invitations, graduation announcements, corporate stationary, business cards and many other creative works. Because of the unique nature of each job, Pauline uses a job order costing system. Below is information pertaining to the current year for Pauline.

Beginning of the year balances:

Materials            $40,000
Work in Process    $67,000
Finished Goods     $22,000

During the year, the following transactions occurred:

• Pauline purchased raw materials for $98,000 on account
• Pauline used $65,000 of raw materials in production. Ninety percent were direct materials and ten percent were indirect materials.
• $120,000 of direct labor and $15,000 of indirect labor was incurred and paid.
• Other manufacturing overhead incurred on account totaled $49,000.
• Pauline completed production on goods costing $200,000.
• Pauline's sales revenue was $612,000. The goods sold had a cost of $160,000
• Pauline's applies overhead at 25% of direct labor cost.
• Pauline collected $535,000 from customers and paid $90,000 to vendors.
• Pauline closes over-/under-applied overhead to Cost of Goods Sold.

Required:

Problem 1: What was the end of the year balance in materials inventory?

Problem 2: What was the end of the year balance in work-in-process inventory?

Problem 3: What was the end of the year balance in finished goods?

Problem 4: What is actual overhead?

Problem 5: What was the amount of overhead applied?

Problem 6: Was overhead under or over applied?

Problem 7: By how much was overhead under or over applied?

Problem 8: What was the adjusted end of the year value of Cost of Goods Sold (prior to closing of the income statement)?