Question & Answer: Highview Corp. applies manufacturing overhead to production at 120% of direct labor cost. During 2015, manufacturing overhead of $94,560…..

Chapte Quiz Instructions I help Question 6 (of 6) Save & Ext Submit Time remaining: 0:08:39 6. Highview Corp. applies manufacturing overhead to production at 120% of direct labor cost. During 2015, manufacturing overhead of $94,560 was applied to production; actual manufacturing overhead was $109,100. Beginning Work in Process Inventory was $13,200 and beginning Finished Goods Inventory was $37,000. Work in Process Inventory increased by 25% during the year and Finished Goods Inventory decreased by 10% during the year. Sales for 2015 were $450,400, yielding a $129,400 gross profit Complete the following schedule: Item Amount Direct Materials Used in Production Direct Labor Manufacturing Overhead Applied Current Manufacturing Costs $94,560 94,560 Beginning Work in Process Inventory Ending Work in Process Inventory Cost of Goods Manufactured Beginning Finished Goods Inventory Ending Finished Goods Inventory Unadjusted Cost of Goods Sold Overhead Adjustment Adjusted Cost of Goods Sold

Highview Corp. applies manufacturing overhead to production at 120% of direct labor cost. During 2015, manufacturing overhead of $94,560 was applied to production: actual manufacturing overhead was $109,100. Beginning Work in Process Inventory was $13,200 and beginning Finished Goods Inventory was $37,000. Work in Process Inventory increased by 25% during the year and Finished Goods Inventory decreased by 10% during the year. Sales for 2015 were $450,400, yielding a $129,400 gross profit. Complete the following schedule:

Expert Answer

Direct material used in production [306060-78800-94560]	132700
Direct labor [94560/120%]	78800
Manufacturing overhead applied	94560
current manufacturing cost [302760+16500-13200]	306060
Beginning WIP	13200
ending WIP [13200 (1+.25)]	-16500
COst of goods manufactured [306460+33300-37000]	302760
Beginning finished goods	37000
ending finished goods [37000(1-.10)]	-33300
Unadjusted cost of goods sold [321000-14540]	306460
overhead adjustment [109100-94560]	14540
Adjusted cost of goods sold [450400-129400]	321000

**reverse working should be made from bottom

Adjusted COGS =Sales- gross profit

overhead adjustment =actual overhead -applied

unadjusted COGS=adjusted -overhead adjustment

ending finished goods =beginning (1-decrease %)

cost of goods manufactured = unadjusted COGS+ending FG-BeginningFG

current cost =cost of goods manufactured-beginning WIP+ending WIP

Direct material = Current cost-labor-overhead

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