Question

I need help with question 8

Sampson Company uses a job order cost system with overhead applied based on direct labor hours. See estimated amounts below. Note the beginning balances for Finished Goods (Job 101) and Work-in-Process (Jobs 102 & 103) for the costs accumulated to date. Also note, the beginning balances in the other balance sheet accounts. Estimated Overhead for 2014 720,000 Estimated Direct Labor Hours for 2014 24,000 During January the comapny had the following transactions: Purchased $10,000 of raw materials on account. Issued the following materials into production: Direct materials Amount Explanation 7,000 Job 102 Job 103 2,000 Used on both jobs. 2,000 5,000 Indirect materials Total 9,000 Recorded salaries and wages as follows: Direct labor Amount 10,000 6,000 4,000 Explanation Job 102 Job 103 For factory supervision For administrative staff Indirect labor 4,000 Salaries 5,000 Total 19,000 Applied overhead to jobs based on the number of direct labor hours required Job Number Job 102 Job 103 Direct labor hours 300 200 Total Recorded the following actual manufacturing costs: Amount Rent Depreciation Insurance Utilities Insurance Explanation 6,000 Paid factory rent in cash 5,000 Factory equipment 3,000 Had one month of factory insurance policy expire 2,000 Received factory utility bill but did not pay it. Total 16,000 Recorded the following general and administrative costs: Advertising Depreciation Other expenses Amount Explanation 2,000 Advertising paid in cash 3,000 Office equipment 1,000 Miscellaneous expense incurred but not paid. Total 6,000 Sold Job 101, which is recorded in Finished Goods: Sales Price Cost 55,000 30,000 (h) Completed Job 102 but did not sell it; Job 103 is still in process at year-end. ired: 1 Compute the predetermined overhead rate. Predetermined overhead rate $30 2 Compute how much overhead would be applied to jobs during the period: Overhead applied $15,000 3 Compute the total cost of Jobs 102 and 103 at the end of the period. You will enter your calculation in the 'Ledger Accounts' tab of this workbook. Where will the cost of each of these jobs appear on the Balance sheet? enter your answer to #3 here. $15000 4 Post the journal entries to the 'T' Accounts in the "Ledger Accounts' tab. Calculate the ending balances in all of the accounts. 5 Calculate the amount of over- or underapplied overhead in the 'Ledger Accounts' tab. 6 Post the journal entry in the T accounts to dispose of the overhead balance in the "Ledger Accounts' tab. 7 Prepare a statement of cost of goods manufactured report in the 'Reports' tab. 8 Prepare an income statement in the 'Reports' tab.

Answer 1

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Solution : Requirement @ : Sampson company cost of goods manufactured and sold for the month Ended Jan 31, 2014 particulars Amount 5) 10000 10000 - 2000 I ODD 7000 10000 11000 32000 Beginning Daw Materials inventory & Raw materials purchased - Indirect materials issued - Ending Raw materials inventory Direct Materials used in production Direct labor Manufacturing overhead Applied Total corrent manot acturing costs plus: Beginning work in process inventory Less Ending work in process inventory cost of goods manotactured ploss Beginning finished goods inventory less Ending finished goods inventory unadjusted cast of Goods Sold ploss underappted overhead Adjusted cost of Goods sold S DOO - 11000 32000 30000 -32000 20000 7000 137000

Requirement ® : Sampson Income For the month Company Statement Ended Jan 31, 2014 Amount $ 55000 (37000) particulars Sales Revenue Less - cost of goods sold Gross profit Less - Selling is Administrative Expenses Net income from operations 18000 ( 1000) $7ooo