Materials:
Beginning inventory $30,000
Purchases $400,000
Ending Inventory $50,000
Work-In-Process:
Beginning Inventory $20,000
Direct labor $360,000
Ending Inventory $300,000
Finished Goods:
Beginning Inventory $10,000
Ending Inventory $50,000
MOH actual: $540,000
Additional Information:
a) Direct Labor wage rate was $15 per hour
b) MOH was allocated at $20 per direct labor hour
c) Sales revenue was $1,090,000
d) Marketing and Distribution costs were $140,000
Required:
1- find out the over or under applied manufacturing overhead.
2- Determine the cost of goods manufactured.
3- Determine the cost of goods sold
4- Prepare income statement using the direct prepare-off method and the Proration method