X Company Reported the Following Actual Cost Data for the Year

question 52

Essay

X Company reported the following actual cost data for the year:
$\begin{array} { l r } \text { Purchase of raw materials (all direct) } & \$ 266,000 \\\text { Direct labour cost } & 160,000 \\\text { Manufacturing overhead costs } & 246,000 \\\text { Change in inventories: } & \\\text { Decrease in raw materials } & \$ 10,000 \\\text { Decrease in work in process } & 8,000 \\\text { Decrease in finished goods } & 16,000\end{array}$
Company used a 150% predetermined overhead rate based on direct labour cost. The rate was based on annual estimated overhead cost and direct labour cost of $252,000 and $168,000, respectively.
Required:
a. Calculate the cost of goods manufactured.
b. What was the cost of goods sold before adjusting for any under or overapplied overhead?
c. By how much was manufacturing overhead cost under or overapplied?
d. Prepare a summary journal entry to close any under or overapplied manufacturing overhead cost to cost of goods sold. Is such an entry appropriate in this situation? Why or why not?
e. Analyze the under or overapplied manufacturing overhead costs calculated in part c above into two separate components: amount due to incorrect estimate of the annual manufacturing overhead costs and an amount due to incorrect estimate of the annual direct labour cost.

Understand the role of interpretation in psychoanalytic therapy.

Comprehend the importance of a nonthreatening atmosphere in client-centered therapy.

Understand the psychological perspectives on the sources of anxiety.

Identify effective practices and their theoretical background in behavior therapy.

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Definitions:

Equity Investments

Investments in stock or equity interests in entities, representing ownership interest.

Adjusted Trial Balance

A list of all the accounts and their balances after adjusting entries have been made, used to prepare financial statements.

External Reporting

The process of providing financial statement information to external stakeholders such as investors, creditors, and regulatory agencies.

Statement of Income

A financial document that shows a company's revenues, expenses, and profits or losses over a specific period of time.