Required: 1.

  Predetermined overhead rate for the year.

Predetermined overhead rate = Budgeted Overhead/ Cost driver
Given :Its predetermined overhead rate was based on a cost formula
that estimated $800,000 of manufacturing overhead for an estimated
allocation base of $500,000 direct material
Predetermined overhead rate= 800,000/ 500,000= 1.6
2.  Amount of underapplied or overapplied overhead for the year.
Actual Overhead= $ 760,000
Overhead applied= $ 800,000
Over applied Overhead = $ 40,000
3. Prepare a schedule of cost of goods manufactured for the year.
Assume all raw materials are used in production as direct materials.
Cost Of Goods Manufactured  
Beginning  Raw Materials                         $ 20,000
Add Purchase of raw materials                 $ 510,000
Less Ending Raw Materials                        $ 80,000
Direct Materials Used                                    $ 450,000
Direct labor cost                                                $ 90,000
Manufacturing overhead costs:                      $ 760,000
Indirect labor $ 170,000
Property taxes $ 48,000
Depreciation of equipment $ 260,000
Maintenance $ 95,000
Insurance $ 7,000
Rent, building $ 180,000
Total Manufacturing Costs :                             $ 1300,000
Add Beginning Work in Process                       $ 150,000
Less Ending  Work in Process                             $ 70,000
Cost Of Goods Manufactured                              $ 1380,000
Add Beginning Finished Goods                        $ 260,000
Cost Of Goods Available for Sale                       $ 1640,000
Less Ending Finished Goods                             $ 400,000
Cost Of Goods Sold                                           $ 1240,000
4. Compute the unadjusted cost of goods sold for the year. Do not
include any underapplied or overapplied overhead in your answer.
Unadjusted Cost Of Goods Sold = $ 1240,000
5. Assume that the $70,000 ending balance in Work in Process includes
$24,000 of direct materials. Given this assumption, supply the
information missing below:
Cost Of Goods Manufactured  
Beginning  Raw Materials                         $ 44,000
Add Purchase of raw materials                 $ 510,000
Less Ending Raw Materials                        $ 80,000
Direct Materials Used                                    $ 474,000
Direct labor cost                                                $ 90,000
Manufacturing overhead costs:                      $ 760,000
Indirect labor $ 170,000
Property taxes $ 48,000
Depreciation of equipment $ 260,000
Maintenance $ 95,000
Insurance $ 7,000
Rent, building $ 180,000
Total Manufacturing Costs :                             $ 1324,000
Add Beginning Work in Process                       $ 150,000
Less Ending  Work in Process                             $ 46,000
Cost Of Goods Manufactured                              $ 1428,000
Add Beginning Finished Goods                        $ 260,000
Cost Of Goods Available for Sale                       $ 1688,000
Less Ending Finished Goods                             $ 400,000
Cost Of Goods Sold                                           $ 1288,000