Question

Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $55,500 and its total manufacturing overhead cost to be $105,450. Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement. Required: 1. Calculate the predetermined overhead rate. 2. Fill in the missing values in the T-accounts. 3. Compute over- or underapplied overhead. 4. Prepare a statement of cost of goods manufactured and sold including the adjustment for over- or underapplied overhead. 5. Prepare a brief income statement for the company.

Answer 1

Answer:

1) Predetermined overhead rate = Total overhead cost ÷ total activity base

                                                      =  105,450 ÷ 55,500

                                                      =  1.9 per direct labor

2) Missing values in T-accounts are given in attached file.

Explanation:

Crucial information to calculate income statement is not provided, so it is impossible to prepare income statement.