Pearl Company reported the following actual cost data for the year:Purchase of raw materials (all...
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Accounting
Pearl Company reported the following actual cost data for the year:
| Purchase of raw materials (all direct) | $300,000 |
| Direct labour cost | 200,000 |
| Manufacturing overhead costs | 269,000 |
| Change in inventories: | |
| Decrease in raw materials | $12,000 |
| Decrease in work in process | 10,000 |
| Decrease in finished goods | 20,000 |
Pearl Company used a 150% predetermined overhead rate based on direct labour cost. The rate was based on annual estimated overhead cost and direct labour cost of $252,000 and $168,000, respectively.
Required:
- Calculate the cost of goods manufactured.
- What was the cost of goods sold before adjusting for any under or overapplied overhead?
- By how much was manufacturing overhead cost under or overapplied?
- Prepare a summary journal entry to close any under or overapplied manufacturing overhead cost to cost of goods sold.
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