Pizza3.144 Inc. produces tactical laser-guided pizza cutters, resulting in perfect straight-line cuts! As Pizza3.144 holds a patent on this item, it enjoys monopolistic favor within the high-tech pizza cutter industry sector.
On December 31, 2024, Pizza3.144 reported the following for its Inventory section of the Balance Sheet:
The first few items from the company's income statement are as follows:
Required:
a. In 2025, the following information summarizes the key product-related transactions throughout the year:
• Total material purchases, $165,000
• Total materials used in production, $127,000
• Total direct labor costs, $60,000
• Total applied MOH, $28,000
• Cost of Goods Manufactured, $210,000
• Cost of Goods Sold, $180,000
• Sales Revenue, $360,000
Present the Inventory section of the Balance Sheet for 2025.
b. Present a partial Income Statement through gross margin for the year ended December 31, 2025.
c. Assuming that no indirect materials were used during 2025, and that MOH was underapplied by $2,000. What was the total actual MOH cost incurred?
d. Assuming that Pizza3.144 applies MOH based upon direct labor cost, what was the budgeted MOH rate for 2025?

Question

Pizza3.144 Inc. produces tactical laser-guided pizza cutters, resulting in perfect straight-line cuts! As Pizza3.144 holds a patent on this item, it enjoys monopolistic favor within the high-tech pizza cutter industry sector.
On December 31, 2024, Pizza3.144 reported the following for its Inventory section of the Balance Sheet:
  The first few items from the company's income statement are as follows:
  Required:
a. In 2025, the following information summarizes the key product-related transactions throughout the year:
• Total material purchases, $165,000
• Total materials used in production, $127,000
• Total direct labor costs, $60,000
• Total applied MOH, $28,000
• Cost of Goods Manufactured, $210,000
• Cost of Goods Sold, $180,000
• Sales Revenue, $360,000
Present the Inventory section of the Balance Sheet for 2025.
b. Present a partial Income Statement through gross margin for the year ended December 31, 2025.
c. Assuming that no indirect materials were used during 2025, and that MOH was underapplied by $2,000. What was the total actual MOH cost incurred?
d. Assuming that Pizza3.144 applies MOH based upon direct labor cost, what was the budgeted MOH rate for 2025?

Quizplus · Accepted Answer

The Answer of Pizza3.144 Inc. produces tactical laser-guided pizza cutters, resulting in perfect straight-line cuts! As Pizza3.144 holds a patent on this item, it enjoys monopolistic favor within the high-tech pizza cutter industry sector.
On December 31, 2024, Pizza3.144 reported the following for its Inventory section of the Balance Sheet:
  The first few items from the company's income statement are as follows:
  Required:
a. In 2025, the following information summarizes the key product-related transactions throughout the year:
• Total material purchases, $165,000
• Total materials used in production, $127,000
• Total direct labor costs, $60,000
• Total applied MOH, $28,000
• Cost of Goods Manufactured, $210,000
• Cost of Goods Sold, $180,000
• Sales Revenue, $360,000
Present the Inventory section of the Balance Sheet for 2025.
b. Present a partial Income Statement through gross margin for the year ended December 31, 2025.
c. Assuming that no indirect materials were used during 2025, and that MOH was underapplied by $2,000. What was the total actual MOH cost incurred?
d. Assuming that Pizza3.144 applies MOH based upon direct labor cost, what was the budgeted MOH rate for 2025?

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