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Far West Manufacturing Company operates a job-order costing system and appliesoverhead cost to jobs on the basis of direct material cost. Its predetermined overhead ratewas based on a cost formula that estimated $500,000 of manufacturing overhead for anestimated allocation base of $390,625 direct material dollars. The company has providedthe following data in the form of an Excel worksheet:Beginning$38,00079,000Ending$55,000166,125Raw MaterialsWork in ProcessFinished Goods47,000138,000The following actual costs were incurred during the year:$450,000$119,000Purchase of raw materialsDirect labor costManufacturing overhead costs:Indirect materials104,875Insurance, factoryDepreciation of equipmentIndirect labor102,00035,00032,700Property taxesMaintenance41,00023,425Rent, building49,000Required:4. Prepare a schedule of cost of goods sold for the year. Adjust the underapplied oroverapplied overhead to cost of goods sold.5. Prepare all journal entries related to manufacturing overhead. Besides indirectmaterials, indirect labor and depreciation, all other costs are recorded as accountspayable.None Far West Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct material cost. Its predetermined overhead rate was based on a cost formula that estimated $500,000 of manufacturing overhead for an estimated allocation base of $390,625 direct material dollars. The company has provided the following data in the form of an Excel worksheet: Beginning Ending Raw Materials $38,000 $55,000 Work in Process 79,000 166,125 Finished Goods 47,000 138,000 The following actual costs were incurred during the year: Purchase of raw materials $450,000 Direct labor cost $119,000 Manufacturing overhead costs: Indirect materials
1 Approved Answer
Subhash P
5Ratings (11 Votes)
4. Prepare a schedule for the cost of goods sold as follows: - Working Note 1: Compute the applied manufacturing overhead rate as follows: - AppliedOverheadRate=ManufacturingOverheadDirectMaterialsCostAppliedOverheadRate=$500,000$390,625AppliedOverheadRate=1.28TimesofDirectMaterialsCost Therefore, the applied...
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