In: Accounting
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.)
References
eBook & Resources
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
4)
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 |
5)
Income Statement :
Sales revenue | $513000 |
Less: COGS | 323370 |
Gross profit | 189630 |
Less: Expenses : | |
Selling | 35700 |
Admintrative | 51750 |
Net operating income | $102180 |