Y Company Reported the Following Actual Costs Data for the Year

question 58

Essay

Y Company reported the following actual costs data for the year:
Y Company used a predetermined overhead rate based on direct labour hours.Estimated annual manufacturing overhead cost and direct labour hours were $150,000 and 20,000,respectively.
Required:
a.What was the pre-determined manufacturing overhead rate?
b.Calculate the cost of goods manufactured.
c.What was the cost of goods sold before adjusting for any under or overapplied overhead?
d.By how much was manufacturing overhead cost under or overapplied?
e.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?
f.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.

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Definitions:

Benefits

In the FAB sales approach, individual values attached to the advantages offered by various product features.

Delivery Salespeople

Sales representatives whose chief role is product delivery; sometimes called route salespeople.

Order-Taking

The process of receiving and processing customer orders, typically performed by sales personnel or through automated systems.

Customer Base

The group of consumers who repeatedly purchase the goods or services of a business, forming its main source of revenue.