Job Cost Journal Entries and T Accounts Following are certain operating data for Durango Manufacturing Company...
Job Cost Journal Entries and T Accounts
Following are certain operating data for Durango Manufacturing Company for January 2016
| Materials Inventory | Work in Process Inventory | Finished Goods Inventory | |
|---|---|---|---|
| Beginning inventory | $114,000 | $48,000 | $150,000 |
| Ending inventory | 66,000 | 81,000 | 96,000 |
Total sales were $3,600,000, on which the company earned a 40% gross profit. Durango uses a predetermined manufacturing overhead rate of 120% of direct labor costs. Manufacturing overhead applied was $720,000. Exclusive of indirect material used, total manufacturing overhead incurred was $486,000 it was over-applied by $45,000.
Required
Compute the following items. (Set up T accounts for Materials Inventory, Work in Process Inventory, Finished Goods Inventory, and Manufacturing Overhead; fill in the known amounts; and then use the normal relationships among the various accounts to compute the unknown amounts.)
-
Cost of goods sold.
-
Cost of goods manufactured.
-
Direct labor incurred
-
Direct material used.
-
Indirect material used.
-
Total materials purchased.
| Materials Inventory | |||
|---|---|---|---|
| Beg. bal. |
114,000 |
Answer | (d) |
| (f) | Answer | Answer | (e) |
| End. bal. | Answer | ||
| Work in Process Inventory | |||
| Beg. bal. |
48,000 |
Answer | (b) |
| (c) | Answer | ||
| (d) | Answer | ||
| Answer | |||
| End. bal. | Answer | ||
| Manufacturing Overhead | |||
| Beg. bal. |
0 |
Answer | |
| Answer | |||
| (e) | Answer | ||
| Answer | End. bal. | ||
| Finished Goods Inventory | |||
| Beg. bal. |
150,000 |
Answer | (a) |
| (b) | Answer | ||
| End. bal. | Answer | ||
Homework Answers
| Cost of Goods sold | = | Sales - Gross Profit | ||
| = | $ 3600000 - 40% of $ 3600000 | |||
| = | $ 2,160,000.00 | |||
| Cost of Goods Manufactured | = | Cost of goods sold + Closing inventory - Opening inventory | ||
| = | $ 2160000 + $ 96000 - $ 150000 | |||
| = | $ 2,106,000.00 | |||
| Direct Labor incurred | = | Manu. OH applied / Predetermined OH rate | ||
| = | $ 720000 / 120% | |||
| = | $ 600,000.00 | |||
| Direct Material Used | = | Cost of Goods manufactured - Opening Inventory - Overhead applied - Direct Labor cost + Ending inventory | ||
| = | $ 2106000 - $ 48000 - $ 720000 - $ 600000 + $ 81000 | |||
| = | $ 819,000.00 | |||
| Indirect Material Used | = | $ 720000 - $ 486000 | ||
| = | $ 234,000.00 | |||
| Total materials purchased | = | $ 66000 + $ 819000 + $ 234000 - $ 114000 | ||
| = | $ 1,005,000.00 | |||
With the help of these, you'd be able to fill up the t-accounts
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Job Cost Journal Entries and T Accounts
Following are certain operating data for Durango Manufacturing
Company...
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