In: Accounting
Strauss Corporation uses normal costing in connection with its job costing system. Beginning and ending balances for the month of December are as follows:
Account
Beginning Balance - December
1st
Ending Balance - December 31st
Direct
Materials
$
1,200
$ 7,600
Work in
Process
$
5,800
$ 8,100
Finished
Goods
$
3,500
$ 18,500
The following additional information is available:
a. Accounts payable account shows a credit for the month in the
amount of $65,400.
b. Cost of goods manufactured for the period was $225,000.
c. The Overhead Control account shows a debit balance of $100,000
before adjustment.
d. The company uses normal costing and applies overhead at the rate
of 120% of direct-labor cost.
1) Compute the total amount of materials requisitioned into production for the period.
2) Conversion costs for the period totaled:
3) Applied overhead for the period was:
4) Normal cost of goods sold for the period is:
5) Actual overhead incurred during the period was:
6) Indicate the mis-applied overhead for period, including BOTH the amount and direction.
7) Using the most theoretically correct manner based on the information given, the journal entry to dispose of under or overapplied overhead would be:
Show all work.
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1) Compute the total amount of materials requisitioned into production for the period. | |||
Beginning Direct Material | $ 1,200 | ||
Add: Purchase (Credit for the month in Payable) | $ 65,400 | ||
Less: Ending Inventory | $ -7,600 | ||
Material Requisitioned | $ 59,000 | ||
2) Conversion costs for the period totaled: | |||
Cost of Goods Manufactured | $ 225,000 | ||
Less:Material Used | $ -59,000 | ||
Less: Beginning Work In process | $ -5,800 | ||
Add: Ending Work in Process | $ 8,100 | ||
Conversion Cost | $ 168,300 | ||
3) Applied overhead for the period was: | |||
Applied Overhead | $ 91,800 | ||
(168300/220*120) | |||
4) Normal cost of goods sold for the period is: | |||
Cost of Good Manufactured | $ 225,000 | ||
Add: Beginning Finished Goods | $ 3,500 | ||
Less: Ending Finished Goods | $ -18,500 | ||
Cost of Goods Sold | $ 210,000 | ||
5) Actual overhead incurred during the period was: | |||
Since Overhead balance was debit balance of 100000 before adjustments, | |||
Actual overhead are | $ 100,000 | ||
6) Indicate the mis-applied overhead for period, including BOTH the amount and direction. | |||
Actual Overhead | $ 100,000 | ||
Applied Overhead | $ 91,800 | ||
Under Applied Overhead | $ 8,200 | ||
7. Jounral Entries | |||
Cost of Goods Sold | $ 8,200 | ||
Manufacturing Overhead | $ 8,200 | ||