Question

# Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis...

 Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated \$110,500 of manufacturing overhead for an estimated allocation base of \$85,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:

 Purchase of raw materials \$ 131,000 Direct labor cost \$ 81,000 Manufacturing overhead costs: Indirect labor \$ 96,400 Property taxes \$ 8,800 Depreciation of equipment \$ 19,000 Maintenance \$ 13,000 Insurance \$ 10,500 Rent, building \$ 40,000

Beginning Ending
Raw Materials \$ 24,000 \$ 13,000
Work in Process \$ 47,000 \$ 37,000
Finished Goods \$ 70,000 \$ 58,000

Part 3:

Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)

Part 4:

Job 215 was started and completed during the year. What price would have been charged to the customer if the job required \$3,700 in direct materials and \$4,700 in direct labor cost and the company priced its jobs at 65% above the job’s cost according to the accounting system? (Round your answer to the nearest dollar.)

Part 5:

Job 215 was started and completed during the year. What price would have been charged to the customer if the job required \$3,700 in direct materials and \$4,700 in direct labor cost and the company priced its jobs at 65% above the job’s cost according to the accounting system? (Round your answer to the nearest dollar.)

 Direct materials \$8,600 Direct labor Manufacturing overhead Work in process inventory \$37,000

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