Question

Bluethorn Company uses normal costing in its job-costing system. Partially completed T-accounts and additional information for Bluethorn for 2017 are as follows: F: (Click the icon to view the T-accounts.) i (Click the icon to view the additional information.) Read the requirements. Requirement 1. What was the amount of direct materials issued to production during 2017? More Info Direct materials issued to production during 2017 was $ T-accounts a. Direct manufacturing labor wage rate was $12 per hour. b. Manufacturing overhead was allocated at $16 per direct manufacturing labor-hour. During the year, sales revenues were $1,020,000, and marketing and distribution costs were $120,000 C. Direct Materials Control Work-in-Process Control Finished Goods Control 1-1-2017 46,000 233,000 1-1-2017 43,000 1-1-2017 11,000 667,800 132,000 Dir. Manuf. 923,920 Print Done labor 354,000 Manufacturing Overhead Allocated Cost of Goods Sold Manufacturing Overhead Control 509,000 Requirements Print Done 1. What was the amount of direct materials issued to production during 2017? 2. What was the amount of manufacturing overhead allocated to jobs during 2017? 3. What was the total cost of jobs completed during 2017? 4. What was the balance of work-in-process inventory on December 31, 2017? 5. What was the cost of goods sold before proration of under-or overallocated overhead? 6. What was the under-or overallocated manufacturing overhead in 2017? 7. Dispose of the under- or overallocated manufacturing overhead using the following: a. Write-off to Cost of Goods Sold b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold 8. Using each of the approaches in requirement 7, calculate Bluethorn's operating income for 2017. 9. Which approach in requirement 7 do you recommend Bluethorn use? Explain your answer briefly.

Answer 1

1	Direct materials issued to production	233000
2	Manufacturing overhead allocated to jobs	472000
3	Total cost of jobs completed	923920
4	Balance in work-in-process inventory	178080
5	Cost of goods sold before proration	667800
6	Under-allocated manufacturing overhead	37000

Working:

2. Direct labor hours used = Direct manufacturing labor/Direct manufacturing labor wage rate = $354000/$12 = 29500

Manufacturing overhead allocated to jobs = 29500 hours x $16 = $472000

4. Balance in work-in-process inventory = 1-1-2017 balance + Direct materials used + Direct manufacturing labor + Manufacturing overhead allocated - Cost of jobs completed = $43000 + $233000 + $354000 + $472000 - $923920 = $178080

6. Manufacturing overhead incurred $509000 - Manufacturing overhead allocated $472000 = Under-allocated manufacturing overhead $37000

Per HOMEWORKLIB RULES the first 4 parts are answerable however 6 parts have been answered. Please post the remaining parts separately. Thank you.