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The Pacific Manufacturing Company operates a job-order costing system and applies overhead

Problem 3-24 Schedule of Cost of Goods Manufactured; Overhead Analysis

The Pacific Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $126,000 of manufacturing overhead for an estimated allocation base of $84,000 direct labor dollars. The company has provided the following data.

  

 

Beginning

Ending

  Raw Materials

$

21,000  

$

16,000  

  Work in Process

$

44,000  

$

40,000  

  Finished Goods

$

68,000  

$

60,000  


   

The following actual costs were incurred during the year:

  

  

 

 

  Purchase of raw materials (all direct)

$

133,000  

  Direct labor cost

$

80,000  

  Manufacturing overhead costs:

 

 

     Insurance, factory

$

7,000  

     Depreciation of equipment

$

18,000  

     Indirect labor

$

42,000  

     Property taxes

$

9,000  

     Maintenance

$

11,000  

     Rent, building

$

36,000  


  

Required:

1-a.

Compute the predetermined overhead rate for the year. (Omit the "%" sign in your response.)

  

1-b.

Compute the amount of underapplied or overapplied overhead for the year. (Input the amount as a positive value. Omit the "$" sign in your response.)

2.

Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. (Input all amounts as positive values. Omit the "$" sign in your response.)

3-a.

Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.) (Omit the "$" sign in your response.)

3-b.

Identify the options available for disposing of underapplied or overapplied overhead? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

 

 

 


Underapplied or overapplied overhead may be allocated among Work in Process, Finished Goods, and Cost of Goods Sold in proportion to the overhead applied


Underapplied or overapplied overhead may be closed directly to Finished Goods


Underapplied or overapplied overhead may be allocated between Work in Process and Finished Goods


Underapplied or overapplied overhead may be allocated between Finished Goods and Cost of Goods Sold in proportion to the overhead applied


Underapplied or overapplied overhead may be closed directly to Work in Process


Underapplied or overapplied overhead may be closed directly to Cost of Goods Sold


Underapplied or overapplied overhead may be allocated between Work in Process and Cost of Goods Sold in proportion to the overhead applied

4.

Job 137 was started and completed during the year. What price would have been charged to the customer if the job required $3,200 in materials and $4,200 in direct labor cost, and the company priced its jobs at 40% above the job’s cost according to the accounting system? (Omit the "$" sign in your response.)

5.

Direct labor made up $8,000 of the $40,000 ending Work in Process inventory balance. Supply the information missing below (Omit the "$" sign in your response):

 


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