Homework Help Save Exit Submit Check my work makes custom w

Homework Help Save & Exit Submit Check my work makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order Wixis Cabinets costing system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can 188 hours per month. The estimated total manufacturing oe head cost at capacity s$ 5,46 per mon ·Th e company bases es predetermined overhead rate on operate up to capacity, so its predetermined overhead rate is $82 per hour of bandsaw use. The results of a recent month\'s operations appear below Ending inventorles Direet materials 5,310 Hanufacturing overhead incurred Selling and adeinistrative expense 14,260 -a. Prepare an income statement that records the cost of unused capacity on the income statement as a period expense -b. How much of the cost of unused capacity can be shown on the income statement as a period expense? Complete this question by entering your answers in the table below.

Solution

a) Wixis Cabinets Income Statements Sales Less: Cost of goods sold (calculated below) Gross Profit Other Expenses Cost of unused capacity (Part b) $1,304.00 Selling and administrative expenses $8,210.00 Net operating income b) Manufacturing overhead incurred $14,260.00 Manufacturing overhead applied (158 hours × $82 hour) $12,956.00 Overhead underapplied $1,304.00 Cost of Unused Capacity = $1,304.00 Cost of Good Sold Direct materials $5,310.00 Direct Labour $8,840.00 Manufacturing overhead applied (158 hours × $82 hour) $12,956.00 Total manufacturing cost $27,106.00 Add: Beginning work in process inventory $0.00 Less: Ending work in process inventory $0.00 Cost of goods manufactured $27,106.00 Beginning finished goods inventory $0.00 Add: Cost of goods manufactured $27,106.00 Goods available for sale $27,106.00 Less: Ending finished goods inventory $0.00 Cost of good Sold $27,106.00