2)
Accounts Receivable | Sales | |||||||
Beg. Bal. | Beg. Bal. | |||||||
k(1) | $1600000 | $1600000 | k(1) | |||||
End. Bal. | $1600000 | End. Bal. | $1600000 | |||||
Raw materials | Cost of goods sold | |||||||
Beg. bal. | $38000 | Beg. Bal. | ||||||
a. | 240000 | 225000 | b. | k(2) | 880000 | |||
End. Bal. | 880000 | |||||||
End. bal. | $53000 | |||||||
Work in process | Manufacturing Overhead | |||||||
Beg. Bal. | $29000 | Beg. Bal. | ||||||
b. | 225000 | 850000 | j. | c. | 63650 | 395250 | i. | |
d. | 270000 | d. | 98000 | |||||
i. | 395250 | e. | 62000 | |||||
g. | 68000 | |||||||
End. Bal. | $69250 | h. | 94500 | |||||
End. Bal. | $9100 | |||||||
Finished goods | Advertising expense | |||||||
Beg. Bal. | $68000 | Beg. Bal. | ||||||
j. | 850000 | 880000 | k(2) | f. | 144000 | |||
End. Bal. | 144000 | |||||||
End. Bal. | $38000 | |||||||
Accumulated Depreciation | Utilities Expense | |||||||
Beg. Bal. | Beg. Bal. | |||||||
80000 | g. | c. | 3350 | |||||
End. Bal. | 80000 | End. Bal. | 3350 | |||||
Accounts Payable | Salaries Expense | |||||||
Beg. Bal. | Beg. Bal. | |||||||
240000 | a. | d. | 150000 | |||||
67000 | c. | |||||||
62000 | e. | End. Bal. | 150000 | |||||
144000 | f. | |||||||
105000 | h. | |||||||
End. Bal. | 618000 | |||||||
Depreciation expense | Salaries & wages payable | |||||||
Beg. Bal. | Beg. Bal. | |||||||
g. | 12000 | 518000 | d. | |||||
End. Bal. | 12000 | End. Bal. | 518000 | |||||
Rent expense | ||||||||
Beg. Bal. | ||||||||
h. | 10500 | |||||||
End. Bal. | 10500 |
Predetermined overhead rate= Estimated manufacturing overhead/Estimated direct labor hours
= $372000/1200= $310 per DLH
Manufacturing overhead applied= 1275*$310= $395250
Calculation of Actual manufacturing overhead
Utilities expense= $67000*95%= $63650
Depreciation expense= $80000*85%= $68000
Rent expense= $105000*90%= $94500
3.
Froya Fabrikker A/S | ||
Schedule of Cost of Goods Manufactured | ||
Direct materials: | ||
Beginning raw materials inventory | $38000 | |
Add: Purchase of raw materials | 240000 | |
Total raw materials available | 278000 | |
Less: Ending raw materials inventory | 53000 | |
Materials used in production | 225000 | |
Direct labor | 270000 | |
Manufacturing overhead applied | 395250 | |
Total manufacturing costs | 890250 | |
Add: Beginning work in process inventory | 29000 | |
919250 | ||
Less: Ending work in process inventory | 69250 | |
Cost of goods manufactured | $850000 |
4-A)
Transaction | General Journal | Debit | Credit |
1. | Manufacturing overhead | $9100 | |
Cost of goods sold | $9100 | ||
(To record overapplied overhead closed to cost of goods sold) |
b)
Froya Fabrikker A/S | |
Schedule of Cost of Goods Sold | |
Beginning finished goods inventory | $68000 |
Add: Cost of goods manufactured | 850000 |
Cost of goods available for sale | 918000 |
Less: Ending finished goods inventory | 38000 |
Unadjusted cost of goods sold | 880000 |
Less: Overapplied overhead | 9100 |
Adjusted cost of goods sold | $870900 |
5)
Froya Fabrikker A/S | ||
Income Statement | ||
For the Year Ended | ||
Sales | $1600000 | |
Less: Cost of goods sold | 870900 | |
Gross profit | 729100 | |
Less: Selling and administrative expenses | ||
Utilities expense (67000*5%) | 3350 | |
Salaries expense | 150000 | |
Advertising expense | 144000 | |
Depreciation expense (80000*15%) | 12000 | |
Rent expense (105000*10%) | 10500 | |
Total selling and administrative expenses | 319850 | |
Net operating income | $409250 |
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Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...
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: 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 $374,000 of manufacturing overhead for an estimated allocation base of 1,100 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 $336,000 of manufacturing overhead for an estimated allocation base of 1,050 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 $336,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year a. Raw materials purchased...
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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 $380,000 of manufacturing overhead for an estimated allocation base of 1,000 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 $329,000 of manufacturing overhead for an estimated allocation base of 940 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 $360,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased...