Question

Part I

Designer Inc. manufactures quality gentlemen's clothing.  The following selected financial information for the fiscal year 2017 is provided:

Item	Amount
Sales	$100,000
Cost of Goods Manufactured	75,000
Direct Material Purchased	30,000
Factory Overhead	10,000
Work in Process - January 1	30,000
Work in Process - December 31	15,000
Direct Material - December 31	10,000
Finished Goods Inventory - December 31	60,000
Net Income	15,000
Direct Materials used	30,000
Cost of Goods Sold	55,000

Use this information to prepared a detailed Schedule of Costs of Goods Manufactured for FY 2017: (Round dollar values & enter as whole dollars only.)

Part II

During March 2017, Rain Corporation recorded $17,000 of costs related to factory overhead. Rain's overhead application rate is based on direct labor hours. The preset formula for overhead application estimated that $18,000 would be incurred, and 10,000 direct labor hours would be worked.  During March, 10,200 hours were actually worked. Use this information to determine (round & enter any final dollar answers to the nearest whole dollar):

            1. the amount of factory overhead that was applied in March

            2. the amount of factory overhead that was over or under applies

            3. was the factory overhead was over applied or under applied

Answer 1

Note:
Labour cost:
Cost of goods manufactured			75000
Add: Ending WIP			15000
Less: Beginning WIP			30000
Currennt cost of material			60000
Less: OH applied			10000
Less: Material incurred			30000
Direct labour cost			20000
Beginning Raw material:
Direct material consumed			30000
Add: Ending inventory			10000
Lless: Purchases			30000
Beginning inventory of material			10000
Schedule showing Cost of Goods manufactured:
Beginning Inventory of Material			10000
Add: Purchases			30000
Total cost of material availablel for use			40000
Less: Ending Inventory of material			10000
Cost of material consumed				30000
Labour cost				20000
OH applied				10000
Total current cost of manufacturing				60000
Add: Beginning WIP inventory				30000
Cost of goods manufacturing				90000
Less: Ending inventory of WIP				15000
Cost of Goods manufactured				75000
Part-11
Estimated Oh			18000
Divide: Direct labour hours			10000
Pre-dtermined OH rate per DLH			1.8
Overheads applied (10200 DLH @1.80)				18360
Actual OH incurred				17000
Over-applied overheads				1360
Overheads over-applied b y $ 1360