Hogle Corporation uses job-order costing and applies overhead cost to jobs on the basis of machine-hours worked. For the just completed year, the company estimated that it would work 75,000 machine-hours and incur $450,000 in manufacturing overhead cost. The company actually worked 80,000 machine-hours. The company has provided the following financial data concerning its actual operations for the year:
Direct Materials $360,000 Indirect Materials $20,000
Direct Labor $75,000 Indirect Labor $110,000
Sales Commissions $90,000 Administrative Salaries $200,000
General Selling Expenses $17,000 Factory Utility Costs $43,000
Advertising Costs $180,000 Factory Depreciation $280,000
Selling and Administrative Depreciation $70,000 Factory Insurance $7,000
Selling and Administrative Insurance $3,000 Sales $1,500,000
Required:
1. Classify each of the above costs as either a Direct Product Cost, Manufacturing Overhead, or a Period Cost by entering the amount in the appropriate column.
2. Compute the Predetermined Overhead Rate.
3. Compute the amount of manufacturing overhead applied to production.
4. Assuming that no work was in progress at the beginning of the year, and no work was in progress at the end of the year, what was the cost of goods manufactured for the year (ie what was the total dollar amount of job costs for the year)?
5. Assuming only one type of product was produced, and 91,500 units were produced during the year, compute the cost per unit.
6. Calculate the amount of overapplied or underapplied overhead for the Year.
7. 87,000 units were sold during the year. Calculate the unadjusted cost of goods sold for the Year.
8. Calculate the adjusted cost of goods sold for the year.
9. Create an Income Statement for the year.