a Raw materials dmrma costs S27000 80 relates to factory ope

a Raw materials dmrma costs, S27.000 (80% relates to factory operations. and 20% ruutes to seing and admnstative addes).

Solution

1 Indirect material 91800 (306000*30%) Indirect labor 35000 Heat, power and water cost 65000 Insurance cost 21600 (27000*80%) Depreciation cost 57750 (77000*75%) Actual manufacturing overheads 271150 Predetermined overheads rate = 163200/32000 5.1 Machine hours 57000 Manufacturing overheads applied 290700 Overapplied overhead cost 19550 (290700-271150) 2 Income statement Sales revenue 734000 Less Cost of goods sold 492000 Gross profit 242000 Less Selling and administrative cost Insurance cost 5400 Advertising cost 67000 Sales commission 27000 Administrative salaries 42000 Depreciation cost 19250 160650 Net income 81350