Divine Bath Works is a leader in the bath fixtures industry

Divine Bath Works is a leader in the bath fixtures industry, rising to prominence with the introduction of over-the-counter sinks. The following data pertain to September, the last month of Divine\'s fiscal year. Type of Inventory Balance as of Septeniber Materials (direct and indirect) Work in Process Finished Goods $28,100 $124,320 $245,000 The Work in Process Inventory on 9/1 consisted of one job, Job X, for 700 units of Model OO, an oval, over-the-counter sink. The Finished Goods Inventory on 9/1 comprised the following: Cost per unit Total Cost Model Number (description) 00 (Oval, over-the counter) RI (Round, in-the counter) OI (Oval, in-the counter) Quantity 100 400 450 $32,000 $78,900 $134,100 1815-251$245,000 $320.00 $197.25 $298.00 Total 95o 970 Divine uses a \"normal\" costing system, combined with the FIFO inventory flow assumption, to cost its inventories. That is, Divine traces actual materials and labor costs to individual jobs. It allocates manufacturing overhead using a predetermined overhead rate computed at the start of the year. Divine allocates overhead using direct lahor hours as the allocation basis (cost driver).

Solution

Job cost table working Model Job Opening WIP Direct material Direct labor Direct labor hours D Overhead D*21 Total Cost Ending WIP Finished Goods F No. of units produced N Cost per unit F/N Model OO X 124320 $22,000 34560 1920 40320 $221,200 $221,200 700 $316.00 Model Ri B 11450 15210 845 17745 $72,935 $72,935 Model oI K 58000 43740 2430 51030 $138,395 $138,395 $200 $691.98 Model Ro L 24000 29365 1678 35238 $88,603 $88,603 700 $126.58 Total $115,450 $122,875 $144,333 $521,133 $72,935 $448,198 Ans 1 Predetermined overhead rate Estimated manufacturing overhead/No. of direct labor hours 1688400/80400 21.00 For September Actual Overhead Supplies $26,430 Indirect labor 32000 Supervision 18400 depreciation 32650 Utilities 8900 factory rent 15400 Total actual overhead $133,780 Actual Overhead $133,780 Applied overhead (21*(1920+2430+1678+845)) 144333 Overapplied overhead for September $10,553 Actual Overhead $1,569,450 Applied overhead (21*75315) 1581615 Overapplied overhead for year $12,165 Overapplied September $10,553 Year $12,165 ans 2 Ending Balance of WIP account Job remaining is Job B Direct material 11450 Direct labor 15210 Manufacturing overhead (845*21) 17745 ans Ending Balance of WIP account 44405 ans 3 units Opening Finished goods iNventory Added Total FG Inventory Sold Ending inventory E Cost per unit C Ending cost of Fg E*C Model OO 100 700 800 750 50 $316.00 $15,800 Model Ri 400 0 400 200 200 $197.25 $39,450 Model oI 450 500 950 400 550 $691.98 $380,586 Model Ro 200 200 150 50 $126.58 $6,329 Ending Finished Goods Inventory Model OO $15,800 Model Ri $39,450 Model oI $380,586 Model Ro $6,329 ans 4 No. of units sold Cost per unit COGS Model OO 750 320 for first 100 and 316 for next 650 454500 Model Ri 200 197.25 39450 Model oI 400 298 119200 Model Ro 150 $126.58 18986 632136 Inocme statement Sales (632136*1.25) 790170 Less: COGS 632136 Gross profit 158034 Less; Operating expenses 20000 Income before tax 138034 Inocme tax 27607 Net Income 110427 If any doubt please comment