Selected T-accounts for Rolm Company are given below for the just completed year:
Raw Materials Manufacturing Overhead
Bal. 1/1 31,000
Credits ?
Debits 390,000
Credits ?
Debits 420,000
Bal. 12/31 56,000
Work in Process Factory Wages Payable
Bal. 1/1 73,000
Credits 710,000
Debits 172,000
Bal. 1/1 14,000
Direct materials 329,000
Credits 176,000
Direct labor 114,000
Bal. 12/31 18,000
Overhead 450,000
Bal. 12/31 ?
Finished Goods Cost of Goods Sold
Bal. 1/1 50,000
Credits ?
Debits ?
Debits ?
Bal. 12/31 131,000
Required:
1.
What was the cost of raw materials put into production during the year?
The cost of raw materials $
2.
How much of the materials in (1) above consisted of indirect materials?
Indirect materials $
3.
How much of the factory labor cost for the year consisted of indirect labor?
Indirect labor cost $
4.
What was the cost of goods manufactured for the year?
Cost of goods manufactured $
5.
What was the cost of goods sold for the year (before considering underapplied or overapplied overhead)?
Cost of goods sold $
6.
If overhead is applied to production on the basis of direct materials cost, what predetermined rate was in effect during the year? (Round your answer to 2 decimal places.)
The predetermined overhead rate was % of direct materials cost
7.
Was manufacturing overhead underapplied or overapplied? By how much? (Input the amount as a positive value.)
Manufacturing overhead was by $
8.
Compute the ending balance in the Work in Process inventory account. Assume that this balance consists entirely of goods started during the year. If $32,400 of this balance is direct materials cost, how much of it is direct labor cost? Manufacturing overhead cost? (Round your predetermined overhead rate percentage and final answers to 2 decimal places.)
Ending balance in the work in process $
Direct labor cost $
Manufacturing overhead cost $
yes
To answer these questions, we need to analyze the given T-accounts for Raw Materials, Work in Process, Finished Goods, and Manufacturing Overhead.
1. To find the cost of raw materials put into production during the year, we need to calculate the change in the Raw Materials account.
Start with the beginning balance of Raw Materials: $31,000
Add the debits (increases) for Raw Materials: $390,000
Subtract the credits (decreases) for Raw Materials: $56,000
The cost of raw materials put into production during the year is $365,000 ($31,000 + $390,000 - $56,000).
2. To determine the amount of indirect materials, we need to look at the debits for Raw Materials. However, the information provided doesn't specify the amount of indirect materials. You would need additional information or clarification to answer this question.
3. To find the amount of indirect labor cost, we need to calculate the change in the Work in Process account for the Factory Wages Payable.
Start with the beginning balance of Factory Wages Payable: $73,000
Add the debits (increases) for Factory Wages Payable: $172,000
Subtract the credits (decreases) for Factory Wages Payable: $18,000
The amount of indirect labor cost is $227,000 ($73,000 + $172,000 - $18,000).
4. The cost of goods manufactured represents the total cost of goods that were completed during the year. To calculate it, we need to analyze the changes in the Work in Process account.
Start with the beginning balance of Work in Process: $73,000
Add the debits (increases) for Work in Process: $710,000 (direct materials) + $114,000 (direct labor) + $450,000 (overhead)
Subtract the credits (decreases) for Work in Process: $18,000
The cost of goods manufactured is $1,329,000 ($73,000 + $710,000 + $114,000 + $450,000 - $18,000).
5. The cost of goods sold represents the total cost of goods that were sold during the year. To calculate it, we need to analyze the changes in the Finished Goods account.
Start with the beginning balance of Finished Goods: $50,000
Add the debits (increases) for Finished Goods: Unknown (information not provided)
Subtract the credits (decreases) for Finished Goods: Unknown (information not provided)
The cost of goods sold cannot be determined without additional information.
6. The predetermined overhead rate is the rate at which overhead costs are applied to production based on the direct materials cost. To calculate it, divide the total overhead cost by the total direct materials cost.
Overhead Cost: $450,000
Direct Materials Cost: $329,000
Predetermined Overhead Rate = (Overhead Cost / Direct Materials Cost) * 100
The predetermined overhead rate is 136.51% (rounded to 2 decimal places).
7. To determine if manufacturing overhead is underapplied or overapplied, we need to compare the overhead applied to production with the actual overhead incurred. However, the information given doesn't provide the amount of overhead applied or the actual overhead incurred. You would need additional information or clarification to answer this question.
8. To compute the ending balance in the Work in Process inventory account, we need to analyze the changes in the account and allocate the balance between direct materials, direct labor, and manufacturing overhead.
Start with the beginning balance of Work in Process: $73,000
Add the debits (increases) for Work in Process: $710,000 (direct materials) + $114,000 (direct labor) + $450,000 (overhead)
Subtract the credits (decreases) for Work in Process: $18,000
The ending balance in the Work in Process inventory account is $1,329,000 ($73,000 + $710,000 + $114,000 + $450,000 - $18,000).
Given that $32,400 of this balance is direct materials cost, the remaining balance of $1,296,600 can be allocated between direct labor and manufacturing overhead. Unfortunately, the information provided does not indicate the specific division between direct labor and manufacturing overhead. You would need additional information or clarification to answer this question.