Transcribed Image Text
In: AccountingGitano Products operates a job-order costing system and appliesoverhead cost to jobs on the basis...Gitano Products operates a job-order costing system and appliesoverhead cost to jobs on the basis of direct materials used inproduction (not on the basis of raw materials purchased). Itspredetermined overhead rate was based on a cost formula thatestimated $110,400 of manufacturing overhead for an estimatedallocation base of $92,000 direct material dollars to be used inproduction. The company has provided the following data for thejust completed year:Purchase of raw materials $ 131,000Direct labor cost $ 88,000Manufacturing overhead costs: Indirect labor $ 85,500 Property taxes $ 8,800 Depreciation of equipment $ 18,000 Maintenance $ 13,000 Insurance $ 7,900 Rent, building $ 39,000BeginningEndingRaw Materials22,00013,000Work in Progress48,00036,000Finished Goods70,00057,000Required:1. Compute the predetermined overhead rate for the year.2. Compute the amount of underapplied or overapplied overheadfor the year.3. Prepare a schedule of cost of goods manufactured for theyear. Assume all raw materials are used in production as directmaterials.4. Compute the unadjusted cost of goods sold for the year. Donot include any underapplied or overapplied overhead in youranswer.5. Assume that the $36,000 ending balance in Work in Processincludes $8,800 of direct materials. Given this assumption, supplythe information missing below: