Question

The following costs are attributed to the Gandalf and Company:

Purchase of raw materials (all direct)	$291,100
Direct labour cost	141,800
Manufacturing overhead costs	198,100
Change in inventories:
Decrease in raw materials	$9,100
Decrease in work in process	4,100
Decrease in finished goods	13,200

Gandalf and Company used a 120% predetermined overhead rate based on direct labour cost.

Required:

3. Calculate the cost of goods manufactured.

3. What was the cost of goods sold before adjusting for any under or over applied overhead?

4. By how much was manufacturing overhead cost under or over applied?

5. Prepare a summary journal entry to close any under or over applied manufacturing overhead cost to cost of goods sold. Is such an entry appropriate in this situation? Why or why not?

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The weighted-average method is used by the Cardiff and Company. Below you will find information provided by the Heating department for the month of March:

Costs for March:	Materials	Conversion
Work in process, March 1	$19,200	$23,100
Added during the month	$89,000	$99,000

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	Units	Conversion percentage complete
Work in process, March 1	10,000	50%
Units started	28,000
Completed and transferred out	19,900
Work in process, March 31	5,000	30%

Required:

Cardiff and Company using the weighted-average method, all materials at the first process:

6. The equivalent units (EUs) of production for materials.

7. The cost per equivalent unit for conversion.

8. The total cost assigned to units transferred out of the Heating Department during March.

9. The cost assigned to work-in-process inventory as of March 31.

Answer 1