I am having so much trouble with this one and could use the

***I am having so much trouble with this one and could use the help. I believe I have the correct answers, but I\'d like to double check. Thank you so much!***

1. Compute the Pre-determined Overhead rate for the year.
2. Compute the Manufacturing Overhead applied to Work in Process.
3. Compute the amount of Underapplied or Overapplied Overhead.
4. Compute Direct Materials Used.
5. Prepare a schedule of Cost of Goods Manufactured for the year.
6. Compute the Cost of Goods Sold.

Example of how end solution should look (No gross margin, operating income, or total operating expenses necessary in above problem. This is simply the format I am using):

PROBLEM 3-14 Schedule of Cost of Goods Manufactured; Overhead Analysis LO3-3,LO3-4 Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be Page 140 used in production. The company has provided the following data for the just completed year: Purchase of raw materials Direct labor cost Manufacturing overhead costs: $510,000 $90,000 $170,000 $48,000 Depreciation of equipment $260,000 $95,000 $7,000 $180,000 Indirect labor Property taxes Maintenance Insurance Rent, building Beginning Ending Raw Materials $20,000 $80,000 Work in Process $150,000 $70,000 Finished Goods $260,000 $400,000 Required:

Solution

1. Predetermined overhead rate = $800000/$500000 = 160% of direct materials used in production

2. Manufacturing overhead applied: $720000

Raw materials used = Beginning balance + Purchases - Ending balance = $20000 + $510000 - $80000 = $450000

Manufacturing overhead applied = $450000 x 160% = $720000

3. Underapplied overheads: $40000

4. Direct materials used: $450000

5.

6.

Note: The unadjusted and adjusted cost of goods sold has been shown in the schedule for cost of goods sold since nothing is mentioned in the question regarding the treatment of underapplied overheads.

Manufacturing overhead costs:
Indirect labor	170000
Property taxes	48000
Depreciation of equipment	260000
Maintenance	95000
Insurance	7000
Rent, building	180000
Total overheads incurred $	760000
Overheads applied	720000
(160% x $450000)
Overheads underapplied $	40000