Question

In: Accounting

a. Purchased materials on​ account, $480,000. b. Incurred total manufacturing wages of $117,000​, which included both...

a. Purchased materials on​ account, $480,000.

b.

 Incurred total manufacturing wages of $117,000​,
which included both direct labor and indirect labor. Used direct labor in manufacturing as​ follows:
  

Direct Labor

Chalet 13. . . . . . . . . . .

$14,200

Chalet 14. . . . . . . . . . .

$28,900

Chalet 15. . . . . . . . . . .

$19,500

Chalet 16. . . . . . . . . . .

$21,000

c.

Requisitioned direct materials in manufacturing as​ follows:

Direct Materials

Chalet 13. . . . . . . . . . . .

$41,800

Chalet 14. . . . . . . . . . . .

$56,700

Chalet 15. . . . . . . . . . . .

$62,600

Chalet 16. . . . . . . . . . . .

$66,000

d.

 Depreciation of manufacturing equipment used on different​ chalets, $6,300.

e.

 Other overhead costs incurred on Chalets 13–​16:
  

Equipment rentals paid in cash. . . . .

$10,400

Prepaid plant insurance expired. . . . .

$4,000

f.

Allocated overhead to jobs at the predetermined rate of​ 60% of direct labor cost.

g.

Chalets​ completed: 13,​ 15, and 16.

h.

 Chalets sold on​ account: 13 for $ 90,000 and 16 for $142,000.


Requirement 2. Post the appropriate entries to the​ T-accounts, identifying each entry by letter. Determine the ending account​ balances, assuming that the beginning balances were zero. Identify the ending account balance with the​ "Bal" reference on the applicable side of the account.

Work in Process Inventory

Finished Goods Inventory

Requirement 3. Summarize the job costs of the unfinished chalet and show that this equals the ending balance in Work in Process Inventory.

Add the costs of the unfinished​ chalet, and show that this total amount equals the ending balance in the Work in Process Inventory account.

Sunset Homes

Reconciliation of Work in Process Inventory Subsidiary

and Control Accounts

Unfinished chalet:

Direct materials

Direct labor

Manufacturing overhead (60% of labor)

Total cost equals Work in Process balance

Requirement 4. Summarize the job cost of the completed chalet that has not yet been sold and show that this equals the ending balance in Finished Goods Inventory.

Sunset Homes

Reconciliation of Finished Goods Inventory Subsidiary

and Control Accounts

Completed, unsold chalet:

Direct materials

Direct labor

Manufacturing overhead (60% of labor)

Total cost equals Finished Goods balance

Requirement 5. Compute the gross profit on each chalet that was sold. What costs must the gross profit cover for Sunset

​Homes?

Begin by determining which costs must be included to compute gross profit for Sunset Homes.

The gross profit must cover these types of​ costs: ​(Complete all answer​ boxes.)

Now compute the gross profit for each chalet sold.

Sunset Homes

Gross Profit on Chalets Sold In May

Less:

Gross profit

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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