Answer:
hello your question is incomplete attached is the complete question and solution
a) Overhead is over applied
b) cost of goods manufactured = $1,225,810
c) net operating income : $118650
Explanation:
A) Predetermined overhead rate = Estimated total overhead cost / Estimated total direct labor hours
$275,000 / 25,000 =
$11 per direct labor hour
Overhead applied = Actual direct labor hours * Predetermined overhead rate
27,760 * $11 = $305,360
Over applied overhead = Overhead applied - Actual overhead $305,360 - $302,750 = $2,610
since the applied overhead is greater than the Actual overhead then the overhead is over applied.
B) STANFORD ENTERPRISES
Cost of Goods Manufactured Report
Particulars Amount Amount
Direct materials:
Beginning raw materials inventory $15,000
Add: Purchase of direct materials $375,000
Raw materials available $390,000
Less: Ending raw materials inventory -$11,375
Direct materials used $378,625 $378,625
Direct labor $536,300
Manufacturing overhead applied $305,360
Total manufacturing costs $1,220,285
Add: Beginning Work in process inventory $27,875
Less: Ending Work in process inventory -$22,350
Cost of goods manufactured $1,225,810
C) INCOME STATEMENT OF STANFORD ENTERPRISES
Income Statement
Particulars Amount Amount
Sales revenue $1,500,000
Less: Cost of goods sold:
Finished goods inventory, beginning $34,600
Plus: Cost of Goods Manufactured $1,225,810
Less: Ending finished goods inventory -$26,450
Unadjusted Cost of goods sold $1,233,960
Less: Overhead applied -$2,610
Adjusted cost of goods sold $1,231,350
Gross profit $268,650
Less: Selling, Gen. & Admin. Expenses
($1,500,000 * 10%) $150000
net operating income $118650
