Fisher Co.’s March 31 inventory of raw materials is $225,000.
Raw materials purchases in April are $790,000, and factory payroll
cost in April is $740,000. Overhead costs incurred in April are:
indirect materials, $119,000; indirect labor, $110,000; factory
rent, $132,000; factory utilities, $77,000; and factory equipment
depreciation, $80,000. The predetermined overhead rate is 80% of
direct labor cost. Job 306 is sold for $1,430,000 cash in April.
Costs of the three jobs worked on in April follow.
Job 306 | Job 307 | Job 308 | ||||||||||
Balances on March 31 | ||||||||||||
Direct materials | $ | 87,000 | $ | 122,000 | ||||||||
Direct labor | 78,000 | 47,000 | ||||||||||
Applied overhead | 62,400 | 37,600 | ||||||||||
Costs during April | ||||||||||||
Direct materials | 193,000 | 307,000 | $ | 158,000 | ||||||||
Direct labor | 201,000 | 295,000 | 134,000 | |||||||||
Applied overhead | ? | ? | ? | |||||||||
Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
1. Prepare Journal entries for the month of April's transactions.
2. General Ledger and Trial Balance
3. Calculate the amount of overhead to be applied to each of the jobs worked on during April. Then, using the drop downs, indicate which account in the ledger should include the job's costs as of April 30.
4. Prepare a schedule of cost of goods manufactured for Fisher Company for the month of April.
5. Select the accounts used in the calculation of gross profit. Enter the amount of gross profit for Fisher Company for the month of April.
JOURNAL ENTRY | |||||||||||||
Account Titles | Debit | Credit | |||||||||||
Raw Materials Inventory | $790,000 | ||||||||||||
Accounts Payable | $790,000 | ||||||||||||
Work in process Inventory | $630,000 | (740000-110000) | (Direct labor) | ||||||||||
Manufacturing Overhead | $110,000 | (Indirect labor) | |||||||||||
Wages Payable | $740,000 | ||||||||||||
Work in process Inventory | $658,000 | Direct materials:(193000+307000+158000) | |||||||||||
Manufacturing Overhead | $119,000 | (Indirect Materials) | |||||||||||
Raw Materials Inventory | $777,000 | ||||||||||||
Manufacturing Overhead | $209,000 | (132000+77000) | |||||||||||
Accrued expenses | $209,000 | ||||||||||||
Manufactiuring Overhead | $80,000 | (Factory equipment deprexiation) | |||||||||||
Accumulated Depreciation | $80,000 | ||||||||||||
Work in process inventory | $504,000 | (Applied Overhead=80%*630000) | |||||||||||
Manufacturing Overhead | $504,000 | ||||||||||||
Finished Goods Inventory | $1,826,800 | (782200+1044600) | (Job 306 and 307) | ||||||||||
Work in Process Inventory | $1,826,800 | ||||||||||||
Cash | $1,430,000 | ||||||||||||
Sales Revenue | $1,430,000 | ||||||||||||
Cost of goods sold | $782,200 | ||||||||||||
Finished goods inventory | $782,200 | ||||||||||||
Job 306 | Job 307 | Job 308 | |||||||||||
Balances on March 31 | |||||||||||||
Direct materials | $ | 87,000 | $ | 122,000 | |||||||||
Direct labor | 78,000 | 47,000 | |||||||||||
Applied overhead | 62,400 | 37,600 | |||||||||||
Costs during April | |||||||||||||
Direct materials | 193,000 | 307,000 | $ | 158,000 | |||||||||
Direct labor | 201,000 | 295,000 | 134,000 | ||||||||||
Applied overhead=80%*Direct labor | 160800 | 236000 | 107200 | ||||||||||
Status on April 30 | Finished (sold) | 782,200 | Finished (unsold) | 1,044,600 | In process | 399,200 | |||||||
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