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    Manufacturing Overheads

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    Burkhammer Inc. has provided the following data for the month of August. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

    Work in Process Finished Goods Cost of Goods Sold Total
    Direct Materials $2,260 $12,180 $81,480 $95,920
    Direct Labor $1,900 $14,500 $97,000 $113,400
    Manufacturing overhead $1,590 $6,890 $44,520 $53,000
    Total $5,750 $33,570 $223,000 $262,320

    Manufacturing overhead for the month was underapplied by $9,000.

    The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.

    Determine the cost of work in process, finished goods, and cost of goods sold AFTER allocation of the underapplied or overapplied overhead for the period

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    Solution Preview

    Solution is provided in a separate Excel file attached. It contains the following parts:

    1. Statement showing allocation of underapplied overhead.

    2. Notes:
    When actual overheads are less than applied overheads it is a case of overabsorption of overheads. On the other hand, ...

    Solution Summary

    Manufacturing overheads are examined.