Question

1. A selected list of accounts used by Firenze Flooring follows: Cash Accounts Receivable Raw Materials Inventory Work In Process Inventory Finished Goods Inventory Accounts or Wages Payable Factory Labor Manufacturing Overhead Cost of Goods Sold Sales Revenue Firenze Flooring uses a job order system and maintains perpetual inventory records. Instructions: Place the appropriate account in the columns indicating the appropriate account(s) to be debited and credited for the transactions listed below. Account(s) Debited Account(s) Credited Transaction a) Raw materials were purchased on account. b) Factory labor was incurred and is due to employees. c) Direct materials were issued to Work in Process. d) Paid for raw materials purchased previously on account. e) Raw materials were issued to the production facility to be used indirectly during the production process. f) Recognized direct labor and supervisor salaries used.

Please please please answer all :))))

Answer 1

Ans.

Transaction	Accounts(Debited)	Accounts(Creditrd)
a	Raw Material Inventory	Accounts Payable
b	Factory Labor	Wages Payable
c	Work In Process Inventory	Raw Material Invenory
d	Accounts Payable	Cash
e	Manufacturing Overhead	Raw Material Invenory
f	Work In Process Inventory	Factory Labor
	Manufacturing Overhead
g	Work In Process Inventory	Manufacturing Overhead
h	Finished Goods Inventory	Work In Process Inventory
i	Accounts Receivable	Sales Revenue
	Cost Of Goods Sold	Finished Goods Inventory

2.

a)

Raw Materials Purchased on Account:

Account Titles	Debit	Credit
Raw materials inventory	$       16,500.00
Accounts Payable		$      16,500.00

Factory Labor Accrued:

Account Titles	Debit	Credit
Factory Labor	$         7,200.00
Wages Payable		$        7,200.00

Incurred Manufacturing Overhead on Account:

Account Titles	Debit	Credit
Manufacturing Overhead	$         4,400.00
Accounts Payable		$        4,400.00

b)

Account Titles	Debit	Credit
Work In Process Inventory	$       12,400.00
Manufacturing Overhead	$         3,000.00
Raw materials inventory		$      15,400.00

3.

a) Compute the predetermined overhead rate per direct labor hour.

Annual manufacturing overhead costs / Direct labor hours

$ 360,000 / 40,000 direct labor hours = $ 9 per direct labor hour

b) Determine the amount of manufacturing overhead applied.

Overhead rate per direct labor hour * Actual direct labor hours

Amount of manufacturing overhead applied = $9 * 41,500 =$ 373,500

c)Determine if overhead is over- or under-applied and the amount.

Over-applied = Amount of manufacturing overhead applied - Actual manufacturing overhead cost

$373,500 – $ 372,000 = $1,500

d)

Account Titles	Debit	Credit
Cost Of Goods Sold	$         4,000.00
Manufacturing Overhead		$      40,000.00