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Exercise 4-15 (continued)
2 a. Molding Department:
The estimated total manufacturing overhead cost in the Molding
Department is computed as follows:
Estimated fixed manufacturing overhead ..................
$800,000
Estimated variable manufacturing overhead
$5.00 per MH × 20,000 MHs .................................
100,000
Estimated total manufacturing overhead cost ............
$900,000
Problem 4-16 (continued)
We can now complete the job cost sheet for the Krimmer Corporation
Problem 4-17 (continued)
Durham Company
Income Statement
For the Year Ended December 31
Sales .................................................
$200,000
Cost of goods sold ..............................
124,000
Gross margin ......................................
76,000
Selling and administrative expenses .....
61,000
Net operating income .........................
$ 15,000
Problem 4-19 (45 minutes)
1. The actual manufacturing overhead costs incurred were as follows:
Reference
(a)
Indirect materials ...................................
$ 38,000
(b)
Indirect labor .........................................
18,000
(c)
Factory heat, power, and water ...............
42,000
(d)
Factory insurance ...................................
9,000
(f)
Factory depreciation ...............................
51,000
Total manufacturing overhead incurred ...
$158,000
In contrast, $170,000 in manufacturing overhead cost was applied to
jobs:
$153,000 =$4.25 per MH; 40,000 MHs×$4.25 per MH=$170,000.
36,000 MHs
Therefore, the overhead was overapplied by $3,000.
Manufacturing overhead incurred ...........
$158,000
Manufacturing overhead applied
(40,000 MHs × $4.25 per MH) .............
170,000
Overhead overapplied ............................
$ 12,000
2. The cost of goods sold for the year (before adjustment for underapplied
or overapplied overhead) is $475,000—the total cost to manufacture the
goods that were sold according to their job cost sheets. The adjusted
cost of goods sold is computed as follows:
Unadjusted cost of goods sold ......................
$475,000
Deduct: Overapplied overhead ......................
12,000
Cost of goods sold ........................................
$463,000
The selling and administrative expenses for the year were:
Reference
(b)
Sales commissions ..................................
$ 10,000
(b)
Administrative salaries ............................
25,000
(d)
Insurance ..............................................
1,000
(e)
Advertising .............................................
50,000
(f)
Depreciation ..........................................
9,000
Total selling and administrative expense ..
$95,000
