Assume that the following T-accounts represent data from the Morgensen Corporation's accounting records.Required: (a) Find the missing amounts represented by the letters a, b, c, d and e.(b) Determine the company's predetermined overhead rate, based on labor cost.BB = Beginning Balance; EB = Ending Balance TO = Transferred OutCost of Goods Sold 39,750 Raw-Material InventoryBB(a) (1)22,500TO15,750EB7,125 Finished GoodsBB6,750 (c) (d)EB10,950 Work-in-Process InventoryBB4,500 Materials(b) Labor24,000 Overhead(e) 43,950EB12,300 Manufacturing Overhead 17,400 12,000 (1) Denotes materials purchased
What will be an ideal response?
(a)
(a) $375 (b) $15,750 (c) $43,950 (d) $39,750 (e) $12,000.
(b)
Overhead applied is $12,000; Direct labor is $24,000.
Predetermined rate: $12,000/$24,000 = 50% of direct labor cost.
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