- Bakersville Company is a manufacturing firm that uses job-order costing. The company’s inventory balances were as follows at the beginning and end of the year:
Beginning Balance Ending Balance Raw materials$14,000$22,000Work in process$27,000$9,000Finished goods$62,000$77,000
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 33,000 machine-hours and incur $231,000 in manufacturing overhead cost. The following transactions were recorded for the year:
- Raw materials were purchased, $315,000.
- Raw materials were requisitioned for use in production, $307,000 ($281,000 direct and $26,000 indirect).
- The following employee costs were incurred: direct labor, $377,000; indirect labor, $96,000; and administrative salaries, $172,000.
- Selling costs, $147,000.
- Factory utility costs, $10,000.
- Depreciation for the year was $127,000 of which $120,000 is related to factory operations and $7,000 is related to selling, general, and administrative activities.
- Manufacturing overhead was applied to jobs. The actual level of activity for the year was 34,000 machine-hours.
- Sales for the year totaled $1,253,000.
- Prepare a schedule of cost of goods manufactured.
- Was the overhead under allocated or overallocated? By how much?
- Prepare an income statement for the year. The company closes any under allocated or overallocated overhead to Cost of Goods Sold
- Parker Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year manufacturing overhead and direct labor-hours were estimated at $50,000 and 20,000 hours, respectively, for the year. In June, Job #461 was completed. Materials costs on the job totaled $4,000, and labor costs totaled $1,500 at $5 per hour. At the end of the year, it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs.
- Job #461 contained 100 units. Determine the unit product cost that would appear on the job cost sheet.
- Determine the under allocated or overallocated overhead for the year
- Summarize the evolution of cost processing in Greece from 1985-2015.
Your response must be at least 400 words in length.