Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher

Exercise 15

Assigning Costs: Missing Data
The following T-accounts represent November activity.

Additional Data
•Materials of $113,600 were purchased during the month, and the balance in the Materials Inventory account increased by $11,000.
•Overhead is applied at the rate of 150 percent of direct labor cost.
•Sales are billed at 180 percent of cost of goods sold before the over- or underapplied overhead is prorated.
•The balance in the Finished Goods Inventory account decreased by $28,600 during the month before any proration of under- or overapplied overhead.
•Total credits to the Wages Payable account amounted to $202,000 for direct and indirect labor.
•Factory depreciation totaled $48,200.
•Overhead was underapplied by $25,080. Overhead other than indirect labor, indirect materials, and depreciation was $198,480, which required payment in cash. Underapplied overhead is to be allocated.
•The company has decided to allocate 25 percent of underapplied overhead to Work-in-Process Inventory, 15 percent to Finished Goods Inventory, and the balance to Cost of Goods Sold. Balances shown in T-accounts are before any allocation.
Required
Complete the T-accounts.