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In: Accounting

The following T-accounts represent November activity. Materials Inventory EB (11/30) 57,100 Work-In-Process Inventory BB (11/1) 32,900...

The following T-accounts represent November activity.

Materials Inventory
EB (11/30) 57,100
Work-In-Process Inventory
BB (11/1) 32,900
Dir.Materials 86,800
Finished Goods Inventory
EB (11/30) 101,000
Cost of Goods Sold
Manufacturing Overhead Control
Applied Manufacturing Overhead
270,000
Wages Payable
Sales Revenue
643,200

Additional Data

(a) Materials of $113,800 were purchased during the month, and the balance in the Materials Inventory account increased by $11,300.
(b) Overhead is applied at the rate of 150 percent of direct labor cost.
(c) Sales are billed at 160 percent of cost of goods sold before the over- or underapplied overhead is prorated.
(d) The balance in the Finished Goods Inventory account decreased by $29,000 during the month before any proration of under- or overapplied overhead.
(e) Total credits to the Wages Payable account amounted to $200,000 for direct and indirect labor.
(f) Factory depreciation totaled $58,250.
(g) Overhead was underapplied by $26,020. Overhead other than indirect labor, indirect materials, and depreciation was $202,070, which required payment in cash. Underapplied overhead is to be allocated.
(h) The company has decided to allocate 25 percent of underapplied overhead to Work-in-Process Inventory, 15 percent to Finished Goods Inventory, and the balance to Cost of Goods Sold. Balances shown in T-accounts are before any allocation.

  

Required:

Complete the T-accounts.

Solutions

Expert Solution

Materials Inventory
BB 45800 86800 Dir.Materials
Purchases 113800 15700 Indir. Materials
EB 57100
Work-In-Process Inventory
BB 32900 373000 Completed
Dir. Materials 86800
Dir. Labor ($270000/150%) 180000
Applied overheads 270000
EB 196700
Under-applied overhead 6505
Adj. EB 399905
Finished Goods Inventory
BB 130000
Completed 373000 402000 Cost of goods sold
EB 101000
Under-applied overhead 3903
Adj. EB 205903
Cost of Goods Sold
($643200/160%) 402000
Under-applied overhead 15612
Adj. EB 417612
Manufacturing Overhead Control
Indir. Materials 15700
Indir. Labor 20000
Factory depreciation 58250
Other overheads 202070
EB 296020
Applied Manufacturing Overhead
270000
26020
296020 EB
Wages Payable
180000 Dir. Labor
20000 Indir. Labor
200000 EB
Sales Revenue
643200
643200 EB

Working:

Allocation of under-applied overheads:

Work-in-process inventory: $26020 x 25% = $6505

Finished goods inventory: $26020 x 15% = $3903

Cost of goods sold: $26020 x 60% = $15612

ekkarill92 answered 1 year ago
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