Please help with calculating overhead accounting problem. See attached.

Please help with calculating overhead accounting problem. See attached.

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Connelly Upholstery, Inc., uses a job-order costing system to accumulate manufacturing costs. The
company’s work in process on December 31, 2013, consisted of one job (No. 2077), which was carried on the year
end balance sheet at $156,800. The year end balance in the direct materials inventory was $80,000. There was no
finished goods inventory on this date.
Connelly applies manufacturing overhead to production on the basis of direct labor cost. Budgeted totals
for 2014 are:
Direct labor hours
50,000
Direct labor cost
4,200,000
Manufacturing overhead cost
5,460,000
Actual results for 2014 are:
Direct labor hours
60,000
Cost of direct materials purchased
5,800,000
Cost of direct materials used
5,600,000
Direct labor cost
4,350,000
Indirect material cost
65,000
Indirect labor cost
2,860,000
Factory depreciation expense
1,740,000
Factory insurance expense
59,000
Factory utilities expense
830,000
Selling and administrative expenses
2,160,000
Job No. 2077 was completed in January 2014. There was no work in process at year end. All jobs produced
during 2014 were sold with the exception of Job No. 2143, which contained direct material costs of $156,000 and
direct labor charges of $85,000 for the 650 direct labor hours worked on this job.
A.
Determine the company’s predetermined (aka budgeted) overhead application rate.
B.
Compute the amount that Connelly would disclose on its December 31, 2014, balance sheet for
1.
Direct materials inventory
2.
Work in process inventory
3.
Finished goods inventory
C.
Compute the amount of over or under applied overhead
at year end.
D.
Calculate the unadjusted Cost of Goods Sold.
E.
Calculate adjusted cost of goods sold for 2014 assuming the amount of under or over applied overhead
computed in Part C is immaterial (insignificant).

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