Answer:
1-a. Predetermined overhead rate for the year.= 1.4
1-b. The underapplied overhead for the year$ 4,600
2. Cost of goods manufactured $ 425,000
3-a.<u>Un adjusted Cost of Goods Sold $ 442,000</u>
3-b. Underapplied or Overapplied overhead Treatment
1) Underapplied overhead may be closed to Cost og goods Sold.
2) It can be separately allocated to WIP , FG and CGS in the proportion of OH applied.
4. Job 215 Price Estimated 155% of $ 13240= $ 20,522
<h2><em><u>
Explanation:</u></em></h2>
1-a. Predetermined overhead rate for the year.
Total Overhead / Direct Material Cost= $123,200 /$88,000= 1.4
1-b. The underapplied or overapplied overhead for the year
Applied OH=Actual Direct Material Cost* Predetermine Rate = $136,000* 1.4= $ 190400
Actual Overhead = $ 195,000
Underapplied Overhead = $ 195,000-$ 190400=$ 4,600
Gitano Products
Cost of goods manufactured Schedule
Raw Materials Beginning $21,000
Add Purchase of raw materials $130,000
Less Raw Materials Ending $15,000
Direct Materials Used $ 136,000
Direct labor cost $84,000
Manufacturing overhead costs: 195,000
Indirect labor $110,500
Property taxes $8,100
Depreciation of equipment $19,000
Maintenance $15,000
Insurance $9,400
Rent, building $33,000
Total Manufacturing Costs $ 415,000
Add Work in Process Beginning $46,000
Cost of goods available for manufacture $ 461,000
Less Work in Process Ending $36,000
<u>Cost of goods manufactured $ 425,000</u>
3-a. Unadjusted cost of goods sold for the year
Cost of goods manufactured $ 425,000
Add Finished Goods Beginning $75,000
Cost of Goods Available for Sale $500,000
Less Finished Goods Ending $58,000
<u>Un adjusted Cost of Goods Sold $ 442,000</u>
<u>3-b. Underapplied or Overapplied overhead Treatment</u>
1) Underapplied overhead may be closed to Cost og goods Sold.
2) It can be separately allocated to WIP , FG and CGS in the proportion of OH applied.
<u>4. Job 215 price</u>
Direct Materials $3,600
Direct Labor $4,600
Applied Overhead ( 1.4 * 3600) = $ 5040
Total Manufacturing Cost = $ 13240
Price Estimated 155% of $ 13240= $ 20,522
