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Directions: Your assignment this week is to answer the three questions below. Please note that Question #3 has 2 parts, Part A and Part B. Please show your work for full credit and use the box provided. Please add more rows or columns to the box if needed.
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1. Biltz Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. During the year, the company actually incurred manufacturing overhead costs of $582,000 and 135,000 direct labor hours were worked. The company estimated that it would incur $525,000 of manufacturing overhead during the year and that 150,000 direct labor hours would be worked.
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By how much was manufacturing overhead overallocated or underallocated for the year?
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2. The following account balances at the beginning of January were selected from the general ledger of Ocean City Manufacturing Company:
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Work-in-process inventory
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Raw materials inventory
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Finished goods inventory
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Additional data:
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1) Actual manufacturing overhead for January amounted to $62,000.
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2) Total direct labor cost for January was $63,000.
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3) The predetermined manufacturing overhead rate is based on direct labor cost. The budget for the year called for $250,000 of direct labor cost and $350,000 of manufacturing overhead costs.
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4) The only job unfinished on January 31 was Job No. 151, for which total direct labor charges were $5,200 (800 direct labor hours) and total direct material charges were $14,000.
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5) Cost of direct materials placed in production during January totaled $123,000. There were no indirect material requisitions during January.
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6) January 31 balance in raw materials inventory was $35,000.
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7) Finished goods inventory balance on January 31 was $34,500.
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What is the cost of goods manufactured for January? Show your work for full credit.
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3. Vintage Fun reproduces old-fashioned style roller skates and skateboards. The annual production and sales of roller skates is 950 units, while 1,750