Beginning Ending

Raw material... $142,000 $162,000
Work in process... 160,000 60,000
Finished goods... 180,000 220,000
Other data:
Direct material used... $652,000
Total manufacturing costs charged to production during the year
(includes direct material, direct labor, and manufacturing overhead
Applied at a rate of 60% of direct-labor cost)... 1,372,000
Cost of goods available for sale... 1,652,000
Selling and administrative expenses... 63,000

Required:
1. What was the cost of raw materials purchased during the year

2. What was the direct-labor cost charged to production during the year?

3. What was the cost of goods manufactured during the year?

4. What was the cost of goods sold during the year?

The controller for Tender Bird Poultry, Inc. estimates that the company’s fixed overhead is $150,000 per year. She also has determined that the variable overhead is approximately $.15 per chicken raised and sold. Since the firm has a single product, overhead is applied on the basis of output units, chickens raised and sold.
Required:
1. Calculate the predetermined overhead rate under each of the following output predictions: 100,000 chickens, 200,000 chickens, and 300,000 chickens.
2. Does the predetermined overhead rate change in proportion to the change in predicted production? Why?

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The controller for Tender Bird Poultry, Inc. estimates that the company’s fixed overhead is $150,000 per year. She also has determined that the variable overhead is approximately $.15 per chicken raised and sold. Since the firm has a single product, overhead is applied on the basis of output units, chickens raised and sold.
Required:
1. Calculate the predetermined overhead rate under each of the following output predictions: 100,000 chickens, 200,000 chickens, and 300,000 chickens.
2. Does the predetermined overhead rate change in proportion to the change in predicted production? Why?
Predetermined overhead rate = Budgeted manufacturing-overhead cost/
Budgeted amount of cost driver (or activity base)

150,000/100,000 = 1.5
150,000/200,000 = .75
150,000/300,000 = .50

That's a start but you still need to add the .15 per chicken, given that all those answers are per chicken.