determining inventory balances overhead
Not what you're looking for?
The following account balances as of January 1, 2008, were selected from the general ledger of Browning Manufacturing Company:
Work in process inventory $0
Materials inventory 521,000
Finished goods inventory $44,000
Additional data:
1) Actual manufacturing overhead for January amounted to $59,000.
2) Total direct labor cost for January was $56,000.
3) The predetermined manufacturing overhead rate is based on direct labor cost. The budget for 2008 called for $300,000 of direct labor cost and $369,000 of manufacturing overhead costs.
4) The only job unfinished on January 31, 2008, was Job No. 410, for which total labor charges were $5,600 (700 direct labor hours) and total direct material charges were $10,000.
5) Cost of direct materials placed in production during January totaled $100,000. There were no indirect material requisitions during January, 20X8.
6) January 31 balance in materials inventory was $29,000.
7) Finished goods inventory balance on January 31 was $30,000.
Use the above to:
1) Determine the predetermined manufacturing overhead rate.
2) Determine the amount of materials purchased during January.
3) Determine cost of goods manufactured for January.
4) Determine the work in process inventory balance on January 31.
5) Determine cost of goods sold for january.
6) Determine whether manufacturing overhead is overallocated or underallocated and by what amount.
Purchase this Solution
Solution Summary
determining overhead, inventory, etc. in manufacturing
Solution Preview
Hello,
1) The manufacturing/labor overhead rate the company determined ("predetermined manufacturing overhead is based on the direct labor rate"). $369,000/$300,000 = 1.23 So, you would multiply the direct labor by 1.23 to calculate the manufacturing overhead rate. In other words, for every $1 spent on labor, $1.23 is spent on manufacturing overhead.
2) Beginning period inventory: $521,000 (?)
less: Actual inventory used in production: $100,000
plus: Direct material purchases:
Ending inventory: $29,000
As you can see the math does not work, as the beginning inventory ...
Purchase this Solution
Free BrainMass Quizzes
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.