Answer

Budgeted manufacturing Overheads costs $ 620,000

Budgeted Direct material costs 387,500
Ocerhead Rate 160.00% of DM Costs

1 Ending balance of Inventories Raw material WIP

Beginning Inventoris 45,000 60,000
Purchases/ Transfer 355,000 375,000
Direct labor 540,000
Manufacturing Overheads applied - 600,000
Transferred to next 375,000 1,475,000
Ending Invenyories 25,000 100,000

Manufacturing Overheads
Utility costs $ 52,500
Indirect labor 225,000
Maintenance costs 37,500
Depreciation 112,500
Rent 180,000
Total manufacturing Overheads 607,500
Applied Manufacturing Overheads as above 600,000
Balance of Manufactirng OH $ 7,500

2 Schedule of Cost of Goods manufactured

Direct material 375,000
Direct labor 540,000
Manufacturing Overheads 600,000
Total 1,515,000
Beginning WIP 62,000
Ending WIP 102,000
Cost of Goods manufactured 1,475,000

3 Schedule of Cost of Goods Sold

Unadjusted Cost of Goods sold $ 1,500,000
Add: Under recovery of Manufacturing OH 7,500
Cost of Goods Sold $ 1,507,500

4 Income Statement
Sales $ 2,500,000
Cost of Goods Sold 1,507,500
Gross profit 992,500
Expenses:
Selling and Administrative salaries 362,500
 Advrtising 325,000
Depreciation 12,500
Rent 45,000
Misc. Selling and Adm. Costs 70,000
Total Expenses 815,000
Operating Profits $ 177,500

5 Job 436
Direct material $ 9,000
Direct labor 11,000
Manufacturing Overheads 14,400
Total Cost of Job $ 34,400
No. of Units 500
Unit Product Cost $ 68.80
Add Profit Margin 75% $ 51.60
Price Charged $ 120.40 per unit
Finished Goods
87,500
1,475,000

1,500,000
62,500