Analyzing Flow of Manufacturing and Nonmanufacturing Costs and Preparing Cost of Goods Manufactured Report and Income Statement
Coda Industries uses a job order cost system. On November 1, the company had the following balance in the accounts:
Raw materials inventory | $ 30,000 |
Work in process inventory | 120,000 |
Finished goods inventory | 145,000 |
The following transactions occurred during November.
(a)Purchased materials on account, $450,500.
(b)Requisitioned materials, $289,300, of which $44,600 was for general factory use.
(c)Recorded factory labor of $326,700 of which $93,200 was indirect.
(d)Incurred other costs:
Selling expense | $44,000 |
Factory utilities | 59,200 |
Administrative expenses | 79,500 |
Factory rent | 25,000 |
Factory depreciation | 94,200 |
(e)Applied overhead during the month totaling $290,000.
(f)Completed jobs costing $607,250.
(g)Sold jobs costing $557,700.
(h)Recorded sales revenue of $850,000.
Required:
1. Post the November transactions to the following T–accounts. (Note: Some transactions will affect other accounts not shown; e.g., Cash, Accounts Payable, Accumulated Depreciation.) You do not need to show the offsetting debit or credit to those accounts.
Raw Materials Inventory | |
Bal. 30,000 |
|
Work in Process Inventory | |
Bal. 120,000 |
|
Finished Goods Inventory | |
Bal. 145,000 |
|
Manufacturing Overhead | |
|
|
Sales Revenue | |
|
|
Cost of Goods Sold | |
|
|
Nonmanufacturing Expenses | |
|
|
2. Compute the balance in the accounts at the end of November.
3. Compute over–or underapplied manufacturing overhead. If the balance is closed directly to Cost of Goods Sold, will it increase or decrease?
4. Prepare Coda’s cost of goods manufactured report for November.
5. Prepare Coda’s November income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over–or underapplied manufacturing overhead.
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