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). Its predetermined overhead rate was based on a cost formula that estimated $127,400 of manufacturing overhead for an estimated allocation base of $91,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: Purchase of raw materials $ 130,000 Direct labor cost $ 87,000 Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance $ 108,000 2$ 8,900 20,000 $ $ 12,000 7,900 33,000 Insurance Rent, building $ Ending Beginning $ 21,000 $ 18,000 $ 46,000 $ 38,000 $ 71,000 $ 58,000 Raw Materials Work in Process Finished Goods
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). Its predetermined overhead rate was based on a cost formula that estimated $127,400 of manufacturing overhead for an estimated allocation base of $91,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: Purchase of raw materials $ 130,000 Direct labor cost $ 87,000 Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance $ 108,000 2$ 8,900 20,000 $ $ 12,000 7,900 33,000 Insurance Rent, building $ Ending Beginning $ 21,000 $ 18,000 $ 46,000 $ 38,000 $ 71,000 $ 58,000 Raw Materials Work in Process Finished Goods
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 10E: Compute the total job cost for each of the following scenarios: a. If the direct labor cost method...
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4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer.
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5. Assume that the $38,000 ending balance in Work in Process includes $8,600 of direct materials. Given this assumption, supply the information missing below:
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Expert Solution
Step 1
Predetermined overhead rate for the year:
= Estimated total manufacturing overhead/Estimated total amount of the allocation base
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