Question

Bodin Company manufactures finger splints for kids who get tendonitis from playing video games. The firm had the following inventories at the beginning and end of the month of January: $ 191,000 Direct labor 300,000 Actual manufacturing overhead 170,000 Actual selling and administrative expenses 115,000 The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year.
Required:
1. Compute the company's prime cost for January. Prime cost
2. Compute the total manufacturing cost for January Total manufacturing cost
3. Compute the cost of goods manufactured for January. Cost of goods manufactured
4. Compute the cost of goods sold for January Cost of goods sold
5. Compute the balance in the manufacturing overhead account on January 31. Debit or credit? Manufacturing overhead account balance on January 31 is

Answer 1

Answer:

Raw Material $191,000

Direct labor $300,000

Actual manufacturing overhead $170,000

Actual selling and administrative expenses $115,000

The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost.

1.

Prime Cost = Direct Material + Direct Labor

Prime Cost = $191,000 + $300,000 = 491,000

2.

Cost of goods manufactured                                    $

Direct material                                                      $191,000

Add: Direct Labor                                                $300,000

Add: Manufacturing overhead                           $170,000

Manufacturing cost                                             $661,000

3.

Manufacturing cost                                             $661,000

Add: Work in process inventory at January 1    $235,000  

Less: Work in process inventory at January 31 $251,000

Cost of Goods Manufactured                             $645,000

4.

Cost of Goods Manufactured                             $645,000

Add: Finished Good inventory at January 1      $125,000  

Less: Finished Good inventory at January 31   $117,000

Cost of Goods Sold                                            $653,000

5.

Manufacturing overhead Account Balance

Actual overhead                = $175,000

Manufacturing overhead   = $180,000  (300,000 x 60% )

Over applied manufacturing overhead = $180,000 - $175,000

Over applied manufacturing overhead = $5,000

* Data was missing for the calculations, complete question is attached with this answer, Please find that.