1.
Transactions | General Journal | Debit | Credit |
a. | Raw materials | 255000 | |
Accounts payable | 255000 | ||
(To record raw materials purchased on account) | |||
b. | Work in process | 240000 | |
Raw Materials | 240000 | ||
(To record direct materials used in production) | |||
c. | Manufacturing overhead ($70000 x 95%) | 66500 | |
Utilities expense ($70000 x 5%) | 3500 | ||
Accounts Payable | 70000 | ||
(To record utility bills incurred on account) | |||
d. | Work in process | 285000 | |
Manufacturing overhead | 101000 | ||
Salaries and wages expense | 165000 | ||
Salaries and wages payable | 551000 | ||
(To record salary and wage costs incurred) | |||
e. | Manufacturing overhead | 65000 | |
Accounts payable | 65000 | ||
(To record maintenance costs incurred on account in factory) | |||
f. | Advertising expense | 147000 | |
Accounts payable | 147000 | ||
(To record advertising costs incurred on account) | |||
g. | Manufacturing overhead ($83000 x 80%) | 66400 | |
Depreciation expense ($83000 x 20%) | 16600 | ||
Accumulated depreciation | 83000 | ||
(To record depreciation for the year) | |||
h. | Manufacturing overhead ($108000 x 85%) | 91800 | |
Rent expense ($108000 x 15%) | 16200 | ||
Accounts Payable | 108000 | ||
(To record rental cost incurred on account) | |||
i. | Work in process (1085 x $370) | 401450 | |
Manufacturing overhead | 401450 | ||
(To record manufacturing overhead applied) | |||
j. | Finished goods | 880000 | |
Work in process | 880000 | ||
(To record goods completed and transferred to finished goods) | |||
k(1) | Accounts receivable | 1750000 | |
Sales revenue | 1750000 | ||
(To record sales on account) | |||
k(2) | Cost of goods sold | 910000 | |
Finished goods | 910000 | ||
(To record cost of sales) |
Predetermined overhead rate = $373700/1010 = $370 per direct labor hour
2.
Raw Materials | Work in Process | |||||||
Debit | Credit | Debit | Credit | |||||
Beg. Bal. | 41000 | Beg. Bal. | 32000 | |||||
a. | 255000 | 240000 | b. | b. | 240000 | 880000 | j. | |
End. Bal. | 56000 | d. | 285000 | |||||
i. | 401450 | |||||||
End. Bal. | 78450 | |||||||
Finished Goods | Manufacturing Overhead | |||||||
Debit | Credit | Debit | Credit | |||||
Beg. Bal. | 71000 | Beg. Bal. | 0 | |||||
j. | 880000 | 910000 | k(2) | c. | 66500 | 401450 | i. | |
d. | 101000 | |||||||
End. Bal. | 41000 | e. | 65000 | |||||
g. | 66400 | |||||||
h. | 91800 | |||||||
End. Bal. | 10750 | |||||||
Sales Revenue | Cost of Goods Sold (COGS) | |||||||
Debit | Credit | Debit | Credit | |||||
1750000 | k(1) | k(2) | 910000 | |||||
End. Bal. | 1750000 | End. Bal. | 910000 | |||||
Rent Expense | Utilities Expense | |||||||
Debit | Credit | Debit | Credit | |||||
h. | 16200 | c. | 3500 | |||||
End. Bal. | 16200 | End. Bal. | 3500 | |||||
Accounts Payable | Accounts Receivable | |||||||
Debit | Credit | Debit | Credit | |||||
255000 | a. | k(1) | 1750000 | |||||
70000 | c. | |||||||
65000 | e. | |||||||
147000 | f. | |||||||
108000 | h. | |||||||
End. Bal. | 645000 | End. Bal. | 1750000 | |||||
Salaries Expense | Salaries Payable | |||||||
Debit | Credit | Debit | Credit | |||||
d. | 165000 | 551000 | d. | |||||
End. Bal. | 165000 | End. Bal. | 551000 | |||||
Advertising Expense | Depreciation Expense | |||||||
Debit | Credit | Debit | Credit | |||||
f. | 147000 | g. | 16600 | |||||
End. Bal. | 147000 | End. Bal. | 16600 | |||||
Accumulated Depreciation | ||||||||
Debit | Credit | |||||||
83000 | g. | |||||||
End. Bal. | 83000 |
3.
Froya Fabrikker A/S | ||
Schedule of Cost of Goods Manufactured | ||
Direct materials: | ||
Beginning raw materials inventory | 41000 | |
Add: Purchases of raw materials | 255000 | |
Total raw materials available | 296000 | |
Less: Ending raw materials inventory | 56000 | |
Materials used in production | 240000 | |
Direct labor | 285000 | |
Manufacturing overheads | 401450 | |
Total manufacturing costs incurred | 926450 | |
Add: Beginning work in process inventory | 32000 | |
Total manufacturing costs | 958450 | |
Less: Ending work in process inventory | 78450 | |
Cost of goods manufactured $ | 880000 |
4A.
Transaction | General Journal | Debit | Credit |
1 | Manufacturing overhead | 10750 | |
Cost of goods sold | 10750 | ||
(To close overapplied overheads to cost of goods sold) |
Note: This transaction has not been posted to the T-accounts since not required by the question.
2 Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment...
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 $373,700 of manufacturing overhead for an estimated allocation base of 1,010 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...
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 $350,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...
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 $357,000 of manufacturing overhead for an estimated allocation base of 1,020 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...
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 $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...
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 $388,800 of manufacturing overhead for an estimated allocation base of 810 direct labor-hours. The following transactions took place during the year. a. Raw materials purchased on...
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 $395,600 of manufacturing overhead for an estimated allocation base of 920 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 $372,000 of manufacturing overhead for an estimated allocation base of 1,200 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...
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: Raw materials purchased on account,...
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 $372,000 of manufacturing overhead for an estimated allocation base of 1,200 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...
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: Raw materials purchased on account,...