Answered

Welcome to Westonci.ca, your ultimate destination for finding answers to a wide range of questions from experts. Get detailed and precise answers to your questions from a dedicated community of experts on our Q&A platform. Our platform offers a seamless experience for finding reliable answers from a network of knowledgeable professionals.

Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 125% of direct labor cost. Selected data concerning the past year's operation of the company are presented below.
January 1 December 31
Direct materials $77,000 $40,000
Work in process 66,000 42,000
Finished goods 115,000 100,000
Other information
Direct materials purchases $324,000
Cost of goods available for sale 950,000
Actual factory overhead costs 260,000
The amount of underapplied or overapplied overhead is:______ .
a. $60,000 overapplied.
b. $60,000 underapplied.
c. $10,000 overapplied.
d. $10,000 underapplied.
e. $0.

Sagot :

Tundexi

Answer:

d. $10,000 underapplied.

Explanation:

Cost of goods manufactured = Cost of goods available for sale - Beginning Finished goods

Cost of goods manufactured = 950000 - 115000

Cost of goods manufactured = $835,000

Total manufacturing Costs = Cost of goods manufactured + Ending Work in process - Beginning Work in process

Total manufacturing Costs = 835000 + 42000 - 66000

Total manufacturing Costs = $811,000

Direct Materials used = 77000 + 324000 - 40000

Direct Materials used = $361,000

Direct Materials used + Direct Labor + Factory Overhead applied = Total Manufacturing costs

361000 + Direct labor + 125% of Direct labor = 811000

225% of Direct labor = $811000 - $361000

225% of Direct labor = $450000

Direct labor = $450000 / 225%

Direct labor = $200,000

Factory Overhead applied = $200,000*125%

Factory Overhead applied = $250,000

Underapplied Overhead = Actual Overhead - Applied Overhead

Underapplied Overhead = $260000 - $250000

Underapplied Overhead = $10,000 (underapplied)

Thank you for visiting our platform. We hope you found the answers you were looking for. Come back anytime you need more information. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.