Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as...

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 $233,270.
(b) Requisitioned materials at a cost of $112,100, of which $16,800 was for general factory use.
(c) Recorded factory labor of $224,900, of which $43,075 was indirect.
(d) Incurred other costs:


Selling expense	$	35,700
Factory utilities		23,300
Administrative expenses		51,750
Factory rent		10,800
Factory depreciation		20,700

(e) Applied overhead at a rate equal to 130 percent of direct labor cost.
(f) Completed jobs costing $262,250.
(g) Sold jobs costing $323,370.
(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?

	Decrease
	Increase

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.)

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Expert Solution

1 & 2) T-Accounts:

Debit Entries	Amount $	Credit Entries	Amount $
Raw Material a/c:
AP	233270	WIP	95300
C/B	121170	M O/H	16800

PAYROLL A/C :
CASH	224900	WIP	181825
		M O/H	43075

MANUF. O/H A/C :
MATERI.	16800	WIP	236372.50
LABOR	43075
UTILITY	23300
RENT	10800
DEPRECIATION	20700
COGS (balancing figure)	121897.50

WIP ACCOUNT :
RM	95300	FG INVENTORY	262250
DL	181825	C/B	251247.50
M O/H	236372.50

F G INVENTORY A/C :
O/B (balancing figure)	61120	COGS	323370
WIP	262250

3a) Manufacturing overhead applied = $236372.50

Less: Actual Manuf overhead = 114675

Over-applied Manuf O/H = $121897.50

3b) COGS decreases by $121897.50

Cost of goods manufactured :

RM:
RM purchased	233270
Less: indirect used	-16800
Less: Closing Balance (balancing figure)	-121170
RM used		95300
DL used (224900 - 43075)		181825
Manuf O/H applied (130% of DLC)		236372.50
Total Cost of Goods Manufactured		$513497.50

Income Statement :

Sales revenue	$513000
Less: COGS	323370
Gross profit	189630
Less: Expenses :
Selling	35700
Admintrative	51750
Net operating income	$102180

ekkarill92 answered 1 year ago

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