(1) An insurance investigator is reconstructing the records of AXYCompany.
Some data were destroyed in a fire, but the following data for the fiscal year survived (there was no over or under applied overhead):
Sales $ 44,000
Purchases of direct materials 8,000
Factory overhead 13,000
Sales commissions 2,000
Direct labor 4,000
Direct materials used 7,600
Gross margin 12,000
Accounts payable, beg. 1,700
Accounts payable, end. 1,500
Work in process, beg. 1,300
Work in process, end. 800
Finished goods, beg. 13,800
To evaluate a claim of fire loss, compute the ending inventory of finished goods.
Answer: (1) 6,900
2) The following financial records pertain to XYZ Inc. in 2001
Raw Materials, beginning 5,000
Raw Materials, ending 20,000
Work in process, beginning 25,000
Work in process, ending 20,000
Finished goods, beginning 5,000
Finished goods, ending 10,000
Cost of Goods Manufactured 200,000
Direct Labor cost 100,000
Materials purchases 65,000
Cost of Goods Sold 200,000
Assuming any over- or under-applied overhead was closed to Cost of Goods Sold, what was XYZ's actual overhead during 2004?
The following problems helps with issues involving over- and under-applied overhead and extraordinary items.