Question

Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below:

The following transactions occurred during April:

(a) Purchased materials on account at a cost of $232,170.
(b) Requisitioned materials at a cost of $112,000, of which $15,600 was for general factory use.
(c) Recorded factory labor of $224,400, of which $43,075 was indirect.
(d) Incurred other costs:

   

Selling expense$35,400

Factory utilities 23,200

Administrative expenses 51,150

Factory rent 11,400

Factory depreciation 20,600

(e) Applied overhead at a rate equal to 135 percent of direct labor cost.
(f) Completed jobs costing $261,950.
(g) Sold jobs costing $324,270.
(h) Recorded sales revenue of $509,000.

Required:
1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. (Round your answers to 2 decimal places.)



3-a. Compute over- or underapplied manufacturing overhead. (Round your answer to 2 decimal places.)



3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will Cost of Goods Sold increase or decrease?

Increase

Decrease

4. Prepare Lamonda’s cost of goods manufactured report for April. (Round your answers to 2 decimal places.)



5. Prepare Lamonda’s April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or underapplied manufacturing overhead. (Round your answers to 2 decimal places.)

1. &2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. (Round your answers to 2 decimal places.) Raw Materials Inventory Work in Process Inventory Beg. Bal. 28,100.00 Beg. Bal. 18,100.00 End. Bal. 28,100.00 End. Bal. 18,100.00 Finished Goods Inventory Manufacturing Overhead Beg. Bal. 123,900.00 Beg. Bal. End. Bal. 123,900.00 End. Bal. 0.00 Cost of Goods Sold Sales Revenue Beg. Bal. Beg. Bal. End. Bal. 0.00 End. Bal. 0.00 Selling and Administrative Expenses

Answer 1

	Raw Materials Inventory
Bal	28,100	112,000	b)
(a)	232,170
Bal.	148,270
	Work in process inventory
Bal	18,100	261,950	f)
(b)	96,400
(c )	181,325
(e )	244788.75
Bal	278,663.75
	Finished Goods inventory
Bal	123,900	324,270	(g)
(f)	261,950
Bal	61,580
	Manufacturing Overhead
Beg bal	0
(b)	15,600	244788.75	e)
( c)	43,075
(d)	23,200
(d)	11,400
(d)	20,600
End bal		130913.75
	Cost of goods sold
Beg bal	0
(g)	324,270
Bal.
	Sales Revenue
Beg.Bal		0
		509,000	(h)
end bal		509,000
	Selling and administrative expense
Beg bal	0
(d)	35,400
(d)	51,150
Bal.	86,550
3-a)
Manufacturing overhead				Overapplied		130,913.75
3-b)	Decrease
Cost of goods manufactured report
Beginning raw materials inventory						28,100
Add:Raw materials purchases						232,170
less:Indirect materials						15,600
less:Ending raw materials inventory						148,270
Direct materials used						96,400
Direct labor						181,325
Manufacturing overhead applied						244788.75
Total current manufacturing costs						522,513.75
Add:Beginning work in process inventory						18,100
less:Ending work in process inventory						278,663.75
Cost of goods manufactured.						261,950.00
Income Statement
Sales Revenue							509,000
Cost of good sold
Beginning finished goods inventory						123,900
Add cost of goods manufactured						261,950.00
less:Ending finished goods inventory						61,580
Unadjusted cost of goods sold						324,270.00
less:Overapplied manufacturing overhead						130,913.75
Adjusted cost of goods sold							193,356.25
Gross profit							315,643.75
Selling & administrative expense							86,550
Net income from operations							229,093.75