4.

value:
25.00 points

HW ASSIGNMENT-2 instructions | help
Ravsten Company uses a job-order costing system.

The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the
company estimated that it would work 38,000 machine-hours and incur $165,300 in manufacturing overhead
cost. The following transactions occurred during the year:

a. Raw materials requisitioned for use in production, $192,000 (75% direct and 25% indirect).
b. The following costs were incurred for employee services:


Direct labor $ 162,000
Indirect labor $ 20,000
Sales commissions $ 12,000
Administrative salaries $ 27,000

c. Heat, power, and water costs incurred in the factory, $44,000.
d. Insurance costs, $12,000 (85% relates to factory operations, and 15% relates to selling and
administrative activities).
e. Advertising costs incurred, $52,000.
f. Depreciation recorded for the year, $62,000 (80% relates to factory operations, and 20% relates to
selling and administrative activities).
g. The company used 42,000 machine-hours during the year.
h. Goods that cost $482,000 to manufacture according to their job cost sheets were transferred to the
finished goods warehouse.
i. Sales for the year totaled $704,000. The total cost to manufacture these goods according to their job
cost sheets was $477,000.

Required:
1. Determine the underapplied or overapplied overhead for the year. (Round your intermediate
calculations to two decimal places.)


$ Overhead overapplied 10,900
2.
Prepare an income statement for the year. (Hint: No calculations are required to determine the cost of
goods sold before any adjustment for underapplied or overapplied overhead.) (Round your
intermediate calculations to two decimal places.)

Waila Fitri Sudharyanto
FI019-Managerial Accounting-14T2: MA2-
Management

$
$
Ravsten Company
Income Statement
For the Year Ended December 31
Sales 704,000
Cost of goods sold 466,100
Gross margin 237,900
Selling and administrative expenses 105,200
Net operating income 132,700
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