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In: Accounting
Chaos Manufacturing had the following financial information for the year ended December 31 2019: Inventory Balances: ...
Chaos Manufacturing had the following financial information for the year ended December 31 2019:
Inventory Balances: Beginning Ending
Work in Progress $ 90,000 $ 80,000
Finished Goods $ 77,000 $ 67,000
Raw Materials $ 10,000 $ 10,000
During the year, the budgeted and actual costs were as follows:
|
Note |
Budget |
Actual |
|
|
Raw Materials |
1 |
300,000 |
290,000 |
|
Labour |
2 |
540,000 |
518,000 |
|
Depreciation Factory Equipment |
72,000 |
72,000 |
|
|
Depreciation Office Equipment |
24,000 |
24,000 |
|
|
Building Rent |
3 |
100,000 |
100,000 |
|
Maintenance – Factory Equipment |
64,000 |
40,000 |
|
|
Utilities – Electrical |
4 |
200,000 |
180,000 |
|
Utilities - Gas |
5 |
100,000 |
90,000 |
|
Sales Commissions |
40,000 |
30,000 |
|
|
Advertising |
30,000 |
20,000 |
|
|
Shipping |
6 |
20,000 |
16,000 |
|
Total |
1,490,000 |
1,380,000 |
Sales for the year were $1,500,000
Note 1 – Raw material
For both budget and actual materials: 90% of raw materials are traced directly to specific jobs, and the remaining 10% of raw materials are used throughout the production process and not traced. $290,000 in materials were purchased in the year.
Note 2 – Labour
Budget: Direct Labour $300,000 + Factory Salaries $80,000 + Head Office Salaries $160,000 = $540,000
Actual: Direct Labour $270,000 + Factory Salaries $85,000 + Head Office Salaries $163,000 = $518,000
Note 3 – Building Rent
The building is shared between the factory and the administrative office. 68% of the building is related to the factory, and the remaining 32% is related to the administrative office.
Note 4 – Utilities Electrical
For both budget and actual, 90% of these costs are related to the factory, and 10% of these costs are related to the administrative office.
Note 5 – Utilities - Gas
All of the Gas is used to heat production equipment.
Note 6 – Shipping
All of the shipping costs are to ship finished goods to customers
Note 7 – Manufacturing Overhead
The manufacturer uses Normal Costing. Overhead is allocated based on Direct Labour costs. Any under/over applied overhead is allocated to Cost of Goods Sold.
Required:
Show the T-accounting for Manufacturing Overhead for the year
Prepare an income statement. You may include a schedule of Cost of Goods Manufactured and Cost of Goods Sold as separate schedules or as part of the Income Statement.
Solutions
Expert Solution
| Overhead allocation rate=Budgeted overhead/Budgeted direct labor cost | |||||||
| Budgeted overhead: | |||||||
| $ | |||||||
| Raw materials | (300000*10%) | 30000 | |||||
| Factory salaries | 80000 | ||||||
| Depreciation Factory Equipment | 72000 | ||||||
| Building Rent-Factory | (100000*68%) | 68000 | |||||
| Maintenance – Factory Equipment | 64000 | ||||||
| Utilities – Electrical-Factory | (200000*90%) | 180000 | |||||
| Utilities - Gas | 100000 | ||||||
| Total | 594000 | ||||||
| Overhead allocation rate=594000/300000=$ 1.98 per direct labor cost | |||||||
| Manufacturing overhead | |||||||
| Particulars | Debit | Particulars | Credit | ||||
| Raw materials-Indirect | (290000*10%) | 29000 | Overhead allocated | 534600 | |||
| Factory salaries | 85000 | (Actual DL cost*OH allocat. Rate) | (270000*1.98) | ||||
| Depreciation Factory Equipment | 72000 | Under-applied oerhead (Plug) | |||||
| Building Rent-Factory | (100000*68%) | 68000 | (To cost of goods sold) | 11400 | |||
| Maintenance – Factory Equipment | 40000 | ||||||
| Utilities – Electrical-Factory (180000*90%) | 162000 | ||||||
| Utilities - Gas | 90000 | ||||||
| 546000 | 546000 | ||||||
| Schedule of cost of goods manufactured and sold | |||||||
| $ | $ | ||||||
| Direct materials used: | |||||||
| Beginning balance of raw materials | 10000 | ||||||
| Add: Materials purchased | 290000 | ||||||
| Raw materials avaialble | 300000 | ||||||
| Less: | |||||||
| Ending balance of raw materials | 10000 | ||||||
| Indirect materials | 29000 | ||||||
| Direct materials used | 261000 | ||||||
| Direct labor | 270000 | ||||||
| Manufacturing overhead applied | 534600 | ||||||
| Total manufacturing costs | 1065600 | ||||||
| Add: Beginning work in process | 90000 | ||||||
| Total work in process inventory | 1155600 | ||||||
| Less: Ending work in process | 80000 | ||||||
| Cost of goods manufactured | 1075600 | ||||||
| Add: Beginning finished goods | 77000 | ||||||
| Goods available for sale | 1152600 | ||||||
| Less: Ending finished goods | 67000 | ||||||
| Cost of goods sold (Unadjusted) | 1085600 | ||||||
| Add: Under-applied overhead | 11400 | ||||||
 ekkarill92 answered 1 year agoRelated SolutionsChaos Manufacturing had the following financial information for the year ended December 31 2019: Inventory Balances: Beginning &nbsChaos Manufacturing had the following financial information for
the year ended December 31 2019:
Inventory
Balances: Beginning Ending
Work in
Progress $
90,000 $
80,000
Finished
Goods $
77,000 $
67,000
Raw
Materials $
10,000 $
10,000
During the year, the budgeted and actual costs were as
follows:
Note
Budget
Actual
Raw Materials
1
300,000
290,000
Labour
2
540,000
518,000
Depreciation Factory Equipment
72,000
72,000
Depreciation Office Equipment
24,000
24,000
Building Rent
3
100,000
100,000
Maintenance – Factory Equipment
64,000
40,000
Utilities – Electrical
4
200,000
180,000
Utilities...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances: ...Chaos Manufacturing had the following financial information for
the year ended December 31 2018:
Inventory Balances:
Beginning
Ending
Work in
Progress
$ 90,000
$ 80,000
Finished
Goods
$ 77,000
$ 67,000
Raw Materials
$ 10,000
$ 30,000
During the year, the budgeted and actual costs were as
follows:
Note
Actual
Raw Materials
1
290,000
Labour
2
518,000
Depreciation Factory Equipment
72,000
Depreciation Office Equipment
24,000
Building Rent
3...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances: ...Chaos Manufacturing had the following financial information for
the year ended December 31 2018:
Inventory Balances:
Beginning
Ending
Work in
Progress
$ 90,000
$ 80,000
Finished
Goods
$ 77,000
$ 67,000
Raw Materials
$ 10,000
$ 30,000
During the year, the budgeted and actual costs were as
follows:
Note
Actual
Raw Materials
1
290,000
Labour
2
518,000
Depreciation Factory Equipment
72,000
Depreciation Office Equipment
24,000
Building Rent
3...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances: ...Chaos Manufacturing had the following financial information for
the year ended December 31 2018:
Inventory Balances:
Beginning
Ending
Work in
Progress
$
90,000
$ 80,000
Finished
Goods
$
77,000
$ 67,000
Raw Materials
$
10,000
$ 30,000
During the year, the budgeted and actual costs were as
follows:
Note
Actual
Raw Materials
1
290,000
Labour
2
518,000
Depreciation Factory Equipment
72,000
Depreciation Office Equipment
24,000
Building Rent
3...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances:...Chaos Manufacturing had the following financial information for
the year ended December 31 2018: Inventory Balances: Beginning
Ending Work in Progress $ 90,000 $ 80,000 Finished Goods $ 77,000 $
67,000 Raw Materials $ 10,000 $ 30,000 During the year, the
budgeted and actual costs were as follows: Note Actual Raw
Materials 1 290,000 Labour 2 518,000 Depreciation Factory Equipment
72,000 Depreciation Office Equipment 24,000 Building Rent 3 100,000
Maintenance – Factory Equipment 40,000 Utilities – Electrical 4
180,000 Utilities...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances: ...Chaos Manufacturing had the following financial information for
the year ended December 31 2018:
Inventory Balances:
Beginning
Ending
Work in
Progress
$ 90,000
$ 80,000
Finished
Goods
$ 77,000
$ 67,000
Raw Materials
$ 10,000
$ 30,000
During the year, the budgeted and actual costs were as
follows:
Note
Actual
Raw Materials
1
290,000
Labour
2
518,000
Depreciation Factory Equipment
72,000
Depreciation Office Equipment
24,000
Building Rent
3...
Question 1 Chaos Manufacturing had the following financial information for the year ended December 31 2018:...Question 1
Chaos Manufacturing had the following financial information for
the year ended December 31 2018:
Inventory
Balances:
Beginning
Ending
Work in
Progress
$ 90,000
$ 80,000
Finished
Goods
$ 77,000
$ 67,000
Raw
Materials
$ 10,000
$ 10,000
During the year, the budgeted and actual costs were as
follows:
Note
Budget
Actual
Raw Materials
1
300,000
290,000
Labour
2
540,000
518,000
Depreciation Factory Equipment
72,000
72,000
Depreciation Office Equipment
...
The following inventory information is available for Muscat Manufacturing Corporation for the year ended December 31,...
The following inventory information is available for Muscat
Manufacturing Corporation for the year ended December 31,
2018:
Beginning
Ending
Inventories:
Raw
materials
$68,000
$76,000
Work in
process
36,000
56,000
Finished
goods
44,000
32,000
Total $148,000
$164,000
In addition, the following transactions occurred in 2018:
1. Raw materials purchased
on account, $280,000.
2. Incurred factory labor,
$320,000, all is direct labor. (Credit Factory Wages Payable).
3. Incurred the following
overhead costs during the year:...
Chevron Corporation's audited financial statements for the year ended December 31, 2019, included the following information:...Chevron Corporation's audited financial statements for the year
ended December 31, 2019, included the following information: sales
were $150 billion, the cost of goods sold was $130 billion, total
assets were $100 billion and 50% of the company's assets were
financed with debt. What was Chevron's total asset turnover in
2019? Please show work.
The following information is from Amos Company for the year ended December 31, 2019.The following information is from Amos Company for the year ended December 31, 2019.
Retained earnings at December 31, 2018 (before discovery of error), $865,000.
Cash dividends declared and paid during the year, $22,000.
Two years ago, it forgot to record depreciation expense of $36,600 (net of tax benefit).
The company earned $221,000 in net income this year.
Prepare a statement of retained earnings for Amos Company.
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