Question

Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below: The following transactions occurred during April:

(a) Purchased materials on account at a cost of $232,470.

(b) Requisitioned materials at a cost of $111,900, of which $16,000 was for general factory use.

(c) Recorded factory labor of $224,400, of which $43,375 was indirect.

(d) Incurred other costs: Selling expense $ 34,700 Factory utilities 23,900 Administrative expenses 51,750 Factory rent 10,100 Factory depreciation 20,000

(e) Applied overhead at a rate equal to 126 percent of direct labor cost.

(f) Completed jobs costing $263,150.

(g) Sold jobs costing $324,370.

(h) Recorded sales revenue of $513,000.

Required:
1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. (Round your answers to 2 decimal places.)

3-a. Compute over- or underapplied manufacturing overhead. (Round your answer to 2 decimal places.)

3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will Cost of Goods Sold increase or decrease?

4. Prepare Lamonda’s cost of goods manufactured report for April. (Round your answers to 2 decimal places.)

5. Prepare Lamonda’s April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or underapplied manufacturing overhead. (Round your answers to 2 decimal places.)

Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. (Round your answers to 2 decimal places.) Beg. Bal. Beg. Bal. (a) Raw Materials Inventory 29,500.00 232.470.00 95.900.00 (6) 10,000.00 (b) 150.070.00 Work in Process Inventory 18.100.00 224.400.00 181.025.00 (c) 43.375.00 (c) points End. Bal. End. Bal. 18.100.00 Manufacturing Overhead Finished Goods Inventory 124.400.00 Beg. Bal. Beg. Bal. End. Bal 124.400.00 End. Bal. Cost of Goods Sold Sales Revenue Beg Bal Beg Bal. End. Bal 0.00 End. Bal 0.00 Nonmanufacturing Expenses Bea Bal < Prev 10f 4 Next >

Answer 1

Desired results: -

Raw Material Inventory					Work in process inventory
Beg.Bal	29,500.00				Beg.Bal	18,100.00	263,150.00	f)
a)	232,470.00	111,900.00	b)		b)	95,900.00
end bal	150,070.00				c)	181,025.00
					e)	228,091.50
Finished goods Inventory					end bal	259,966.50
BegBal.	124,400.00
f)	263,150.00	324,370.00	g)		Manufacturing overhead
End bal	63,180.00				Beg.Bal
					b)	16,000.00	228,091.50	e)
Cost of Goods sold					c)	43,375.00
BegBal.					d)	23,900.00
g)	324,370.00				d)	10,100.00
end bal	324,370.00				d)	20,000.00
							114,716.50	end bal
Selling And Administrative expense
Beg.Bal					Sales Revenue
d)	34,700.00				Beg.Bal
d)	51,750.00						513,000.00	h)
End bal	86,450.00				End Bal		513,000.00

3a)	Manufacturing overhead	overapplied	114,716.50
3b)	Decrease

4)	Cost of goods manufactured Report
	Beginning raw materials inventory		29,500.00
	Add Raw materials purchases		232,470.00
	less indirect materials		16,000.00
	less ending raw materials inventory		150,070.00
	Direct materials used		95,900.00
	Direct labor		181,025.00
	manufacutring overhead applied		228,091.50
	total current manufacturing costs		505,016.50
	Add Beginning work in process inventory		18,100.00
	less ending work in process inventory		259,966.50
	Cost of goods manufactured		263,150.00
5)	Income statement
	Sales revenue		513,000.00
	cost of goods sold
	Beginning finished goods inventory	124,400.00
	Add cost of goods manufactured	263,150.00
	less ending finished goods inventory	63,180.00
	Unadjusted Cost of goods sold	324,370.00
	less:overapplied manufacturing overhead	114,716.50	209,653.50
	Gross profit		303,346.50
	Selling and administrative expense		86,450.00
	Net income from operations		216,896.50

Please find below table in order to compute above results: -

G H L M P =B15 I Work in process inventory Beg Bal =B16 =B12 I=B2-B3 =B4-B5 =J4*B11 end bal =SUM(J2:15)-K2 b) R2 =B1 =B3 =E4 = 3 B12 Cost of goods manufactured Report Beginning raw materials inventory Add Raw materials purchases less indirect materials less ending raw materials inventory Direct materials used Direct labor manufacutring overhead applied total current manufacturing costs Add Beginning work in process inventory less ending work in process inventory Cost of goods manufactured Manufacturing overhead 1 Purchased Materials 2 Requisitioned material 3 General Factory use 4 Factory Labor 5 Indirect Factory labor 6 Selling Expense 7 Factory utilities 8 Administrative Expenses 9 Factory Rent 10 Factory Depreciation 11 Applied overhead rate 12 Completed Jobs costing 13 Sold Jobs costing 14 Sales Revenue 15 Beg. Raw materials 16 Beg. WIP inventory 17 Beg. Finished goods Inventory 18 Beg Bal в ср Т F 232470 Raw Material Inventory 111900 Beg. Bal =B15 16000 a) =B1 =B2 224400 end bal =E2+E3-F3 43375 34700 Finished goods Inventory 23900 BegBal. =B17 51750 =B12 10100 End bal =E7+E8-F8 20000 =126/100 Cost of Goods sold 263150 BegBal. 324370 =B13 513000 end bal =E13 29500 18100 Selling And Administrative expense 124400 Beg Bal ORG =B8 End bal =E18+E19 =J5 =SUM(P6:P8) =B16 =J5 =B3 =B5 =B7 =B9 =B10 =P9+P10-P11 =K10-SUM(J10:J14) end bal =B14 Sales Revenue Beg Bal 19 =B14 Income statement Sales revenue cost of goods sold Beginning finished goods inventory =B17 Add cost of goods manufactured less ending finished goods inventory =E9 Unadjusted Cost of goods sold =017+018-019 less overapplied manufacturing overhead =K15 Gross profit Selling and administrative expense Net income from operations End Bal I=K19 3a) 3b) Manufacturing overhead overapplied |=K15 Decrease =O20-021 =P15-P21 =E20 =P22-P23

End results would be as follows: -

G H I P F Raw Material Inventory 29,500.00 232,470.00 111.900.00 b) 150,070.00 | use Beg Bal b) Work in process inventory 18,100.00 263,150.00 95,900.00 181,025.00 228,091.50 259,966.50 end bal Finished goods Inventory 124.400.00 263,150.00 324,370.00 63,180.00 А 1 Purchased Materials Requisitioned material 3 General Factory use 4 Factory Labor 5 Indirect Factory labor 6 Selling Expense 7 Factory utilities 8 Administrative Expenses 9 Factory Rent 10 Factory Depreciation 11 Applied overhead rate 12 Completed Jobs costing 13 Sold Jobs costing 14 Sales Revenue 15 Beg. Raw materials 16 Beg. WIP inventory 17 Beg. Finished goods Inventory 18 в ср Т 232,470.00 111.900.00 Beg Bal 16,000.00 a) 224,400.00 end bal 43,375.00 34.700.00 23,900.00 BegBal. 51.750.00 10,100.00 End bal 20,000.00 1.26 263,150.00 BegBal. 324,370.00 513,000.00 end bal 29,500.00 18.100.00 124,400.00 Beg Bal LM Cost of goods manufactured Report ) | Beginning raw materials inventory Add Raw materials purchases less indirect materials less ending raw materials inventory Direct materials used Direct labor manufacutring overhead applied total current manufacturing costs ) Add Beginning work in process inventory less ending work in process inventory Cost of goods manufactured g) 29,500.00 232,470.00 16,000.00 150.070.00 95,900.00 181,025.00 228,091.50 505,016.50 18,100.00 259,966.50 263,150.00 Manufacturing overhead | Beg Bal 228,091.50 Cost of Goods sold 16,000.00 43,375.00 23,900.00 10,100.00 20.000.00 13) 324,370.00 324,370.00 । 114.716.50 end bal 513,000.00 Selling And Administrative expense Sales Revenue Beg Bal 34,700.00 51,750.00 86,450.00 513,000.00 h) 513,000.00 Income statement . Sales revenue cost of goods sold | Beginning finished goods inventory Add cost of goods manufactured less ending finished goods inventory Unadjusted Cost of goods sold less:overapplied manufacturing overhead Gross profit Selling and administrative expense Net income from operations 124,400.00 263,150.00 63,180.00 324,370.00 114,716.50 End bal End Bal 3a) 36) overapplied 114,716.50 Manufacturing overhead Decrease 209,653.50 303.346.50 86,450.00 216,896.50