Corporation is a manufacturer that uses joborder costing The

Corporation is a manufacturer that uses job-order costing. Thec Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Beginning inventories: Estimated total manufacturing overhead at the beginning of the Estimated direct labor-hours at the beginning of the year $ 30,000 $568,000 32,000 direct labor- hours for use in production 501,000 $683,000 Direct labor cost Actual direct labor-hours Manufacturing overhead: 33,000 direct labor Indirect labor cost other manufacturing overhead costs incurred 176,000 420,000 Selling and administrative: and Other selling and administrative expenses Cost of goods manufactured Sales revenue Cost of goods sold (unadjusted) $ 219,00o 346,000 $1,567,000 $2.498.000 $1,376,000 The net operating income is: of 10

Solution

[redeterminedManufacturing overhead rate=total mfg overhead/direct labour hpours
=568000/32000=18
Applied overhead=33000*18=585750
Actial overhead=176000+420000=596000
so it is underapplied by 596000-585750=10250

Net operating income=sales-cost of goods sold(Adjusted)-selling and admin exp
=2498000-(1376000+10250)-(219000+346000)
=546750