Is manufacturing overhead underapplied or overapplied for the year? By how much?What is the cost of goods available for sale during the year? (Show complete calculations)What is the journal entry to record the cost of goods sold referred to above?What is the ending balance in Finished Goods? (Show T-Account)Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?What is the gross margin for the year?What is the net operating income for the year? Part 1.Rhiner Corporation is a manufacturer that uses job-order costing. On January 1, thecompany's inventory balances were as follows:Raw materialsWork in processFinished goods$42,000$20,000$36,000The company applies overhead cost to jobs on the basis of direct labor-hours. For thecurrent year, the company's predetermined overhead rate of $16.50 per direct labor-hour was based on a cost formula that estimated $660,000 of total manufacturingoverhead for an estimated activity level of 40,000 direct labor-hours. The followingtransactions were recorded for the year:Raw materials were purchased on account, $520,000.Raw materials used in production, $465,000. All of the raw materials were usedas direct materials.The following costs were accrued for employee services: direct labor, $605,000,indirect labor, $150,000, selling and administrative salaries, $240,000.Incurred various selling and administrative expenses (e.g., advertising, salestravel costs, and finished goods warehousing), $357.000.• Incurred various manufacturing overhead costs (e g., depreciation, insurance,and utilities), $505,000.• Manufacturing overhead cost was applied to production. The company actuallV.worked 42,000 direct labor-hours on all jobs during the year.Jobs costing $1,685,000 to manufacture according to their job cost sheets werecompleted during the year.Jobs were sold on account to customers during the year for a total of $2,750,000.The jobs cost $1,695,000 to manufacture according to their job cost sheets.

Answered: Is manufacturing overhead underapplied…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter26: Manufacturing Accounting: The Job Order Cost System

Section: Chapter Questions

Problem 8SPA: JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD Eto Manufacturing had the following transactions...

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Is manufacturing overhead underapplied or overapplied for the year? By how much?
What is the cost of goods available for sale during the year? (Show complete calculations)
What is the journal entry to record the cost of goods sold referred to above?
What is the ending balance in Finished Goods? (Show T-Account)
Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?
What is the gross margin for the year?
What is the net operating income for the year?

Part 1.
Rhiner Corporation is a manufacturer that uses job-order costing. On January 1, the
company's inventory balances were as follows:
Raw materials
Work in process
Finished goods
$42,000
$20,000
$36,000
The company applies overhead cost to jobs on the basis of direct labor-hours. For the
current year, the company's predetermined overhead rate of $16.50 per direct labor-
hour was based on a cost formula that estimated $660,000 of total manufacturing
overhead for an estimated activity level of 40,000 direct labor-hours. The following
transactions were recorded for the year:
Raw materials were purchased on account, $520,000.
Raw materials used in production, $465,000. All of the raw materials were used
as direct materials.
The following costs were accrued for employee services: direct labor, $605,000,
indirect labor, $150,000, selling and administrative salaries, $240,000.
Incurred various selling and administrative expenses (e.g., advertising, sales
travel costs, and finished goods warehousing), $357.000.
• Incurred various manufacturing overhead costs (e g., depreciation, insurance,
and utilities), $505,000.
• Manufacturing overhead cost was applied to production. The company actuallV.
worked 42,000 direct labor-hours on all jobs during the year.
Jobs costing $1,685,000 to manufacture according to their job cost sheets were
completed during the year.
Jobs were sold on account to customers during the year for a total of $2,750,000.
The jobs cost $1,695,000 to manufacture according to their job cost sheets.

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