Question

Computer Company manufactures laptops devices for students. The firm had the following inventories at the beginning and end of the month of February:

Finished goods Work in process Raw material

February 1 $253,500 195,300 126,900

February 31 $186,700 521,600 121,300

The following additional data pertain to February operations

Raw material purchased
Direct labor
Actual manufacturing overhead
Actual selling and administrative expenses

178,300 420,200 375,100 115,400

The company applies manufacturing overhead at the rate of 75 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year.

d) The cost of goods sold for February

e) What is the amount of over or under applied overhead at the end of February (Points 2.5)?

f) If on February 1, the Computer Company had under applied overhead of $61,650, what is the total under or over applied overhead at February 28 (Points 2.5)?

Answer 1

Solution d:

Computer company
Schedule of cost of goods manufactured and sold
For february month
Particulars		Amount
Direct materials:
Beginning inventory of raw materials	$126,900.00
Raw material purchases	$178,300.00
Raw materials available for use	$305,200.00
Less: Ending inventory of raw materials	$121,300.00
Direct materials used		$183,900.00
Direct labor		$420,200.00
Factory overhead applied		$315,150.00
Total manufacturing costs		$919,250.00
Add: beginning WIP		$195,300.00
Total cost of work in process		$1,114,550.00
Less: Ending WIP		$521,600.00
Cost of goods manufactured		$592,950.00
Add: Beginning finished goods inventory		$253,500.00
Cost of goods available for sale		$846,450.00
Less: Ending finished goods inventory		$186,700.00
Cost of goods sold		$659,750.00

Solution e:

amount of over or under applied overhead at the end of February = Actual overhead - Overhead applied = $375,100 - $315,150 = $59,950

Solution f:

total under or over applied overhead at February 28 = $61,650 + $59,950 = $121,600