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 $342,000 of manufacturing overhead for an estimated allocation base of 950 direct labor-hours. The following transactions took place during the year:
1. Raw materials purchased on account, $210,000. 2. Raw materials used in production (all direct materials), $195,000. 3. Utility bills incurred on account, $61,000 (95% related to factory operations, and the remainder related to selling and administrative activities). 4. Accrued salary and wage costs:
Direct labor (1,025 hours) | $ | 240,000 |
Indirect labor | $ | 92,000 |
Selling and administrative salaries | $ |
120,000 |
The balances in the inventory accounts at the beginning of the year were:
Raw Materials | $ | 32,000 |
Work in Process | $ | 23,000 |
Finished Goods | $ | 62,000 |
Required:Req 2-Post your entries to T-accounts. (Don’t forget to enter the beginning inventory balances above)
Req 3 -Prepare a schedule of cost of goods manufactured. |
Req 4A- Record the journal entry to close any balance in the manufacturing overhead account to cost of goods sold. 4B-Prepare a schedule of cost of goods sold. Req 5- Prepare an income statement for the year. |
answer 4A) manufacturing overhead DR 9,750
cost of goods sold CR 9,750
The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the...
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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,...
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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 $349,800 of manufacturing overhead for an estimated allocation base of 1,060 direct labor-hours. The following transactions took place during the year:Raw materials purchased on account, $230,000.Raw...
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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,...