During the month of January, the following costs were incurred:
2010
Jan 8 Purchased Materials for cash, $150,000
Jan 10 Requisition for Direct Materials that were put into production, $100,000
Jan 20 Requisitioned for Indirect Materials that were put into production, $4,000.
Jan 23 Direct Labor cost incurred during the period, $60,000 when the labor rate per hour was $5.
Jan 25 Indirect labor cost incurred during the month of January is $6,000.
Jan 28 Paid factory supervisor’s salaries on account, $18,000
Jan 31 Accrued indirect factory wages, $5,000
Jan 31 Accrued Office Salaries, $7,000
Jan 31 Depreciation on Office Building, $10,000
Jan 31 Depreciation on factory equipment $6,000
The following other information items were made available:
Beginning work in process is $20,000 and the ending work in process is $5,000.
The beginning finished goods inventory is $100,000.
The company sold 80% of the cost of goods available for sale for $600,000 on account.
The company uses perpetual inventory system.
Instruction:
Make necessary journal entries to show the flow of the cost of goods produced and sold.
Open “T” accounts for relevant accounts, show the beginning balances where applicable, post all your journal entries to the appropriate accounts.
What is the over- or under-appied factory overhead?
What is the goods available for sale?
Make necessary entry for the disposition of immaterial over- or under-applied factory overhead.
ABC had an estimated factory overhead of $600,000 and an estimated direct labor hours of 100,000. The company applies factory overhead, using direct labor hours as the cost driver.
During the period, the company incurred $60,000 direct labor cost at a rate of $5 per hour.
The actual factory overhead incurred is $80,000.
Required:
What is the predetermined overhead rate?
What is the over- or under-applied factory overhead.
Assuming that $50,000, $100,000, and $200,000 were balances found in Cost of Goods sold, Work-in-process, and finished goods, respectively, make necessary entries for the disposal of material under- or over-applied overhead.
A. The Journal Entries are as follows:
Date | Particular | Debit | Credit |
Jan 8 | Purchased Material | $150,000 | |
To Cash | $150,000 | ||
Jan 10 | Work-in-Process | $100,000 | |
To Raw Material | $100,000 | ||
Jan 20 | Manufacturing Overhead | $4000 | |
To Raw Material | $4000 | ||
Jan 23 | Work-in-Process | $75,000 | |
To Wages Payable | $75,000 | ||
(Beg WIP+Direct Labor-Ending WIP) | |||
Jan 25 | Factory Overhead | $6,000 | |
To Factory Payroll | $6,000 | ||
Jan 28 | Wages Payable | $18,000 | |
To Factory Supervisor | $18,000 | ||
Jan 31 | Factory Overhead | $5,000 | |
To Accrued Factory Payroll | $5,000 | ||
Jan 31 | Salaries Expense | $7,000 | |
To Accrued Wages Payable | $7,000 | ||
Jan 31 | Depreciation on Office Building | $10,000 | |
Depreciation on factory equipment | $6,000 | ||
To Accumulated Depreciation | $16,000 | ||
Jan 31 | COGS Expense | $700,000 | |
To Purchases and Inventory | $700,000 | ||
( $100,000+$600,000) Finished Goods+COGS |
B. T-accounts are as follows:
Raw Material | |||||
Date | Debit | Amount | Date | Credit | Amount |
Jan 8 | Purchased | $150,000 | |||
Cash Account | |||||
Jan 8 | Paid Cash | $150,000 | |||
Work-in-Process | |||||
Jan 10 | Direct Material Cost | $100,000 | |||
Wages Payable | |||||
Jan 23 | Direct Labor Cost | $75,000 | |||
Factory Overhead | |||||
Jan 25 | Factory Payroll | $6,000 | |||
Wages Payable | |||||
Jan 28 | Supervisor's Salary | $18,000 | |||
Depreciation Account | |||||
Jan 31 | Accumulated Depreciation | $16,000 | |||
COGS | |||||
Jan 31 | Cash | $700,000 |
a. The factory overhead is over applied, when the budgeted overhead is less than the actual amount of overhead incurred in the factory, whereas, under applied situtaion occurs when the budgeted overhead is higher than the actual overhead amount.
b. The goods available for sale is the net amount of product which the company can sell during the particular period. It is the net quantity of product available for sale from the producer side in the specified period.
c. What is the predetermined overhead rate?
The rate used to allocate the estimated manufacturing overhead amount to the cost objects, in the given accounting period, is known as Predetermined overhead rate.
1. 2. Problem Information: Morrison Company began the year with the following balances in its inventory accounts: Raw Materials $ 125.000 • Work-in-Process $ 320,000 • Finished Goods S 400.000 Morrison applies overhead to production using direct labor cost. As of the beginning of the year, Morrison estimated total manufacturing overhead for the year to be $300,000 and total direct labor cost to be $600,000 The following transactions occurred during the year: Purchased $100,000 of raw materials on account. Used...
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Problem Information: Morrison Company began the year with the following balances in its inventory accounts: • Raw Materials $ 125,000 • Work-in-Process $ 320,000 • Finished Goods $ 400.000 Morrison applies overhead to production using direct labor cost. As of the beginning of the year, Morrison estimated total manufacturing overhead for the year to be $300,000 and total direct labor cost to be $600,000 The following transactions occurred during the year: 1. Purchased $100,000 of raw materials...
REQUIRED. Round all answers to the nearest dollar. 1. (1 point) Compute the predetermined overhead rate Morrison will use to apply MOH to Work-in-process. 2. (1 point) Compute the amount of overhead applied to Work-in-process during the year. 3. (3 points) Compute the ending balances in Raw Materials, Work-in-process, and Finished Goods accounts (hint: don't forget to include beginning balances). 4. (2 points) Compute the amount of over- or under-applied overhead for the year (be sure to label it as...
Problem Information: Jackson Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000 Finished Goods $ 400,000 Jackson Co. applies overhead to production using direct labor cost. As of the beginning of the year, Jackson co. estimated total manufacturing overhead for the year to be $300,000 and total direct labor cost to be $600,000. The following transactions occurred during the year: 1. Purchased $100,000 of raw materials on account....
Urgent please, thank you.
Problem Information: Morrison Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000 Finished Goods $ 400,000 . Morrison applies overhead to production using direct labor cost. As of the beginning of the year, Morrison estimated total manufacturing overhead for the year to be $300,000 and total direct labor cost to be $600,000. The following transactions occurred during the year: 1. Purchased $100,000 of raw materials on...
5. (2 points) Assuming Morrison closes under or over-applied overhead to Cost of Goods Sold, compute adjusted COGS for the period. 6. (2 points) Prepare a traditional format income statement for the year. (ignore income taxes). 7. (1 point) Clarity of supporting computations. Problem Information: Morrison Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000 Finished Goods $ 400,000 Morrison applies overhead to production using direct labor cost. As of...
please show equations and work used to figure out the
problems
. Morrison Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000 Finished Goods $ 400,000 . Morrison applies overhead to production using direct labor cost. As of the beginning of the year, Morrison estimated total manufacturing overhead for the year to be $300,000 and total direct labor cost to be $600,000. The following transactions occurred during the year: 1....
The highlighted numbers are the raw materials used in
production. Since 80% of that number is direct materials, then 9876
are direct materials. Since 20% is indirect materials, 2469 are
indirect materials.
Morrison Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000 Finished Goods $ 400,000 Morrison applies overhead to production using direct labor cost. As of the beginning of the year, Morrison estimated total manufacturing overhead for the year...
16. During the month, Franco Corp. had the following job order costing data: Cost of Goods Sold $300,000 Direct Labor cost incurred $92,000 Indirect Labor cost incurred $19,000 Indirect Materials used in production $31,000 Finished Goods beginning balance $125,000 Finished Goods ending balance $100,000 Manufacturing Overhead cost applied $150,000 Work-in-Process beginning balance $12,000 Work-in-Process ending balance $30,000 There was no over/under-applied Overhead. What amount of Direct Materials were used in production during the period?
use
any 15,000 as used raw material
Problem Information: Morrison Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000 Finished Goods $ 400,000 . . . Morrison applies overhead to production using direct labor cost. As of the beginning of the year, Morrison estimated total manufacturing overhead for the year to be $300,000 and total direct labor cost to be $600,000. The following transactions occurred during the year: 1. Purchased...