Question

Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $54,800 and its total manufacturing overhead cost to be $98,640.

Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement.

Required:
1. Calculate the predetermined overhead rate.

2. Fill in the missing values in the T-accounts.

3. Compute over- or underapplied overhead.

4. Prepare a statement of cost of goods manufactured and sold including the adjustment for over- or underapplied overhead.

5. Prepare a brief income statement for the company.

ll in the missing values in the T-accounts.

Raw Materials Inventory Work in Process Inventory Beginning Balance 13,300 Beginning Balance 28,700 Purchases 93,700 Direct Materials 69,800 Ending Balance 29,600 Direct Labor $41,600 Applied Overhead Ending Balance 18,800 Finished Goods Inventory Cost of Goods Sold Beginning Balance 40,600 Unadjusted Cost of Goods Sold Cost of Goods Completed Adjusted Cost of Goods Sold Ending Balance 48,200 Sales Revenue Manufacturing Overhead 309,000 Indirect Materials 7,600 Applied Overhead Indirect Labor 13,900 Factory Depreciation 12,900 Factory Rent 5,500 Factory Utilities 1,800 Other Factory Costs 8,200 Actual Overhead 49,900 Selling, General, and Administrative Expenses Adm. Salaries 26,900 Office Depreciation 18,900 Advertising 14,000 Ending Balance 59,800

Answer 1