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- Calculate the cost of goods manufactured.
2. What was the cost of goods sold before adjusting for any under or over applied overhead?
3.). By how much was manufacturing overhead cost under or over applied?
4.) Prepare a summary journal entry to close any under or over applied manufacturing overhead cost to cost of goods sold.
5) .Is such an entry appropriate in this situation? Why or why not?
Gandalf and Company used a 120% predetermined overhead rate based on direct labor cost.
The following costs are attributed to the Gandalf and Company:
| Purchase of raw materials (all direct) | $291,100 |
| Direct labor cost | 141,800 |
| Manufacturing overhead costs | 198,100 |
| Change in inventories: | |
| Decrease in raw materials | $9,100 |
| Decrease in work in process | 4,100 |
| Decrease in finished goods | 13,200 |
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