1)
Event | Account titles and explanation | Debit | Credit |
a. | Raw Materials Inventory | $245000 | |
Accounts Payable | $245000 | ||
(To record materials purchased) | |||
b. | Work in Process Inventory | $230000 | |
Raw Materials Inventory | $230000 | ||
(To record direct materials used in production) | |||
c. | Manufacturing Overhead ($68000*85%) | $57800 | |
Utilities Expense ($68000*15%) | $10200 | ||
Accounts Payable | $68000 | ||
(To record utilities bills incurred on account) | |||
d. | Work in Process Inventory | $275000 | |
Manufacturing Overhead | $99000 | ||
Salaries Expense | $155000 | ||
Salaries and Wages Payable ($275000+99000+155000) | $529000 | ||
(To record salary and wages incurred) | |||
e. | Manufacturing Overhead | $63000 | |
Accounts Payable | $63000 | ||
(To record maintenance costs incurred on account) | |||
f. | Advertising Expense | $145000 | |
Accounts Payable | $145000 | ||
(To record advertising costs incurred on account) | |||
g. | Manufacturing Overhead ($81000*70%) | $56700 | |
Depreciation Expense ($81000*30%) | $24300 | ||
Accumulated Depreciation : Equipment | $81000 | ||
(To record depreciation expense) | |||
h. | Manufacturing Overhead ($106000*75%) | $79500 | |
Rent Expense ($106000*25%) | $26500 | ||
Accounts Payable | $106000 | ||
(To record rent incurred on account) | |||
i. | Work in Process Inventory ($320*1125) | $360000 | |
Manufacturing Overhead | $360000 | ||
(To record manufacturing overhead applied) | |||
j. | Finished Goods Inventory | $860000 | |
Work in Process Inventory | $860000 | ||
(To record work in process transferred to finished goods) | |||
k(1) | Accounts Receivable | $1650000 | |
Sales | $1650000 | ||
(To record sales on account) | |||
k(2) | Cost of Goods Sold | $890000 | |
Finished Goods Inventory | $890000 | ||
(To record cost of goods sold) |
Predetermined overhead rate= Estimated manufacturing overhead/Estimated direct labor hours
= $336000/1050= $320 per direct labor hour
2)
Accounts Receivable | Sales | |||||||
Beg. Bal. | Beg. Bal. | |||||||
k(1) | 1650000 | 1650000 | k(1) | |||||
End. Bal. | $1650000 | End. Bal. | ||||||
Raw materials | Cost of goods sold | |||||||
Beg. bal. | $39000 | Beg. Bal. | ||||||
a. | 2450000 | 230000 | b. | k(2) | 890000 | |||
End. Bal. | ||||||||
End. bal. | $54000 | |||||||
Work in process | Manufacturing Overhead | |||||||
Beg. Bal. | $30000 | 860000 | j. | Beg. Bal. | ||||
b. | 230000 | c. | 57800 | 360000 | i. | |||
d. | 275000 | d. | 99000 | |||||
i. | 360000 | e. | 63000 | |||||
g. | 56700 | |||||||
End. Bal. | $35000 | h. | 79500 | |||||
End. Bal. | 4000 | |||||||
Finished goods | Advertising expense | |||||||
Beg. Bal. | $69000 | Beg. Bal. | ||||||
j. | 860000 | 890000 | k(2) | f. | 145000 | |||
End. Bal. | 145000 | |||||||
End. Bal. | 39000 | |||||||
Accumulated Depreciation | Utilities Expense | |||||||
Beg. Bal. | Beg. Bal. | |||||||
81000 | g. | c. | 10200 | |||||
End. Bal. | 81000 | End. Bal. | 10200 | |||||
Accounts Payable | Salaries Expense | |||||||
Beg. Bal. | Beg. Bal. | |||||||
245000 | a. | d. | 155000 | |||||
68000 | c. | |||||||
63000 | e. | End. Bal. | 155000 | |||||
145000 | f. | |||||||
106000 | h. | |||||||
End. Bal. | 627000 | |||||||
Depreciation expense | Salaries & wages payable | |||||||
Beg. Bal. | Beg. Bal. | |||||||
g. | 24300 | 529000 | d. | |||||
End. Bal. | 24300 | End. Bal. | 529000 | |||||
Rent expense | ||||||||
Beg. Bal. | ||||||||
h. | 26500 | |||||||
End. Bal. | 26500 |
3.
Froya Fabrikker A/S | ||
Schedule of Cost of Goods Manufactured | ||
Direct materials: | ||
Beginning raw materials inventory | $39000 | |
Add: Purchase of raw materials | 245000 | |
Total raw materials available | 284000 | |
Less: Ending raw materials inventory | 54000 | |
Raw materials used in production | $230000 | |
Direct labor | 275000 | |
Manufacturing overhead applied | 360000 | |
Total manufacturing costs | 865000 | |
Add: Beginning work in process inventory | 30000 | |
Total cost of work in process | 895000 | |
Less: Ending work in process inventory | 35000 | |
Cost of goods manufactured | $860000 |
4-A) Actual manufacturing cost= $57800+99000+63000+56700+79500= $356000
Overapplied or underapplied overhead= Actual manufacturing cost-Applied manufacturing costs
= $356000-360000=$4000 overapplied
Event | Account titles and explanation | Debit | Credit |
Manufacturing overhead | $4000 | ||
Cost of goods sold | $4000 | ||
(To record overapplied manufacturing overhead close to cost of goods sold) |
b)
Froya Fabrikker A/S | |
Schedule of Cost of goods sold | |
Beginning finished goods inventory | $69000 |
Add: Cost of goods manufactured | 860000 |
Cost of goods available for sale | 929000 |
Less: Ending finished goods inventory | 39000 |
Unadjusted cost of goods sold | 890000 |
Less: Overapplied overhead | 4000 |
Adjusted cost of goods sold | $886000 |
5)
Froya Fabrikker A/S | ||
Income Statement | ||
For the Year Ended | ||
Sales | $1650000 | |
Less: Cost of goods sold | 886000 | |
Gross profit | 764000 | |
Less: Selling and administrative expenses | ||
Utilities expense | 10200 | |
Salaries expense | 155000 | |
Advertising expense | 145000 | |
Depreciation expense | 24300 | |
Rent expense | 26500 | |
Total selling and administrative expenses | 361000 | |
Net operating income | $403000 |
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $374,000 of manufacturing overhead for an estimated allocation base of 1,100 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased...
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $374,000 of manufacturing overhead for an estimated allocation base of 1,100 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased...
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $336,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased...
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $380,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased...
please help Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea of fields. The company uses a job order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor hours. Its predetermined overhead rate was based on a cost formula that estimated $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year a....
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $329,000 of manufacturing overhead for an estimated allocation base of 940 direct labor-hours. The following transactions took place during the year. a. Raw materials purchased...
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labo hoursIts predetermined overhead rate was based on a cost formula that estimated $372,000 of manufacturing overhead for an estimated allocation base of 1.200 direct laborhours. The following transactions took place during the year Froya Fabrikker A/S of Bergen, Norway,...
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- ed overhead rate was based on a cost formula that estimated $395,600 of manufacturing overhead for an estimated allocation base of 920 direct labor-hours. The following transactions took place during the year: points a. Raw materials purchased on...
Froya Fabrik AS of Bergen, Norway, is a small company that manufactures specialty Heavy equipment for Norm Sao nelas. The company uses a job-order cosong system that applies manufacturing overhead cost to jobs on the basof director hours. Its predetermined overeed rate was based on a cost formula that estimated $350.000 of manufacturing overhead for estimated allocation base of 1000 direct labor hours. The following transactions took place during the year a. Raw materials purchased on account, $250,000 b Raw...
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $382,500 of manufacturing overhead for an estimated allocation base of 850 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased...