tpx cost at 420000 and total e hours at 60000 During the frs

tpx cost at $420,000 and total e hours at 60,000 During the frst month of operations, the company worked on nvee yobs and reconded the folowing acus drect maten costret aor co s 14,400 S 11.200 s 9,600 s 28 800 s 49600 1,000 hours 4.000 hours 2000 hours 7000 hours Job 101 was completed and soid for $60,000 Job 102 was completed but not sold Job 103 Is still in process Actual overhead costs recorded during the irst month of operanions totaled $45,000 overhead rate overhead appied to the Work in Process Inventory account duing the first month of operations 2. Compute the total account atte end of the nst morn Compute the baance in the work in process inven

Solution

Answer to Part 1.

Predetermined Overhead rate = Estimated Manufacturing Overhead / Estimated Machine Hours
Predetermined Overhead rate = 420,000 / 60,000
Predetermined Overhead rate = $7 per Machine Hour

Answer to Part 2.

Total Manufacturing Overhead Applied = Total Machine Hours Applied * Predetermined Overhead rate
Total Manufacturing Overhead Applied = 7,000 hours * $7
Total Manufacturing Overhead Applied = $49,000

Answer to Part 3.

Ending Work in Process Inventory (Job 103) = $9,600 + $9,600 + (2,000 * $7)
Ending Work in Process Inventory (Job 103) = $9,600 + $9,600 + $14,000
Ending Work in Process Inventory (Job 103) = $33,200

Answer to Part 4.

Since, only the Job 101 is sold, the Gross profit will be Calculated for Job 101 Only.

Cost of Job 101 = $19,200 + $28,800 + (1,000 * $7)
Cost of Job 101 = $19,200 + $28,800 + $7,000
Cost of Job 101 = $55,000

Sales = $60,000
Gross Profit = Sales – Cost of goods Sold
Gross Profit = $60,000 - $55,000
Gross Profit = $5,000

Answer to Part 5-a.

Actual Manufacturing Overhead = $45,000
Manufacturing Overhead Applied = $49,000
Balance in Manufacturing Overhead Account = $49,000 - $45,000
Balance in Manufacturing Overhead Account = $4,000

The Manufacturing Overhead are Overapplied, as the Actual Overhead are less than the Overhead Applied.