Answer:
Baab Corporation
a. Schedule of cost of goods manufactured:
Beginning work in process $ 27,850
Direct raw materials 280,150
Direct labor 377,850
Manufacturing overhead 297,279
Ending work in process ($ 9,850)
Cost of goods manufactured $973,279
b. The overhead was underapplied (by $9,121).
Explanation:
a) Data and Calculations:
Beginning Ending
Raw materials $ 14,850 $ 22,850
Work in process $ 27,850 $ 9,850
Finished Goods $ 62,850 $ 77,850
Estimated machine hours = 33,850
Manufacturing overhead cost = $294,495
Predetermined overhead rate = $294,495/33,850 = $8.70 per mh
Raw materials purchase $315,850
Raw materials used for production $307,850
Direct raw materials $280,150
Indirect raw materials $27,700
Direct labor$377,850
Indirect labor, $96,850
Administrative salaries, $172,850
Selling costs, $147,850
Factory utility costs, $10,850
Depreciation:
Factory Depreciation $171,000
Selling, general, and admin. $7,000
Total for the year was $178,000
Actual level of activity for the year = 34,170 machine hours
Sales for the year = $1,315,000
Manufacturing Overhead:
Indirect raw materials $27,700
Indirect labor, 96,850
Factory utility costs, 10,850
Factory Depreciation 171,000
Total overhead incurred $306,400
Overhead applied 297,279
Underapplied overhead $9,121
