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QUESTION 3:

The following cost data relate to the manufacturing activities of Jako Company during the just completed year:

Manufacturing overhead costs incurred:

Indirect materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000

Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520,000

Property taxes, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000

Utilities, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280,000

Depreciation, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 960,000

Insurance, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40,000

Total actual manufacturing overhead costs incurred . . . . . . . . . .. . .$1,892,000

Other costs incurred:

Purchases of raw materials (both direct and indirect) . . . . . . . . . . . .$1,600,000

Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $240,000

Inventories:

Raw materials, beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,000

Raw materials, ending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,000

Work in process, beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160,000

Work in process, ending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $280,000

The company uses a predetermined overhead rate to apply overhead cost to production. The rate for the year was $100 per machine-hour. A total of 77,600 machine-hours were recorded for the year.

Required:

1. Prepare schedule of cost of goods manufactured for the year.

2. Compute the amount of underapplied or overapplied overhead cost for the year.Close it in the Cost of Goods Sold.

3- Prepare schedule of cost of goods sold for the year, showing the adjusted amount.

Answer & Explanation Solved by verified expert

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