In: Accounting
Barrymore Costume Company, located in New York City, sews
costumes for plays and musicals. Barrymore considers...
Barrymore Costume Company, located in New York City, sews
costumes for plays and musicals. Barrymore considers itself
primarily a service firm, as it never produces costumes without a
preexisting order and only purchases materials to the
specifications of the particular job. Any finished goods ending
inventory is temporary and is zeroed out as soon as the show
producer pays for the order. Overhead is applied on the basis of
direct labor cost. During the first quarter of the year, the
following activity took place in each of the accounts listed:
Work In Process |
Bal. |
17,000 |
Complete |
245,000 |
DL |
80,000 |
|
|
OH |
140,000 |
|
|
DM |
40,000 |
|
|
Bal. |
32,000 |
|
|
Finished Goods |
Bal. |
40,000 |
Sold |
210,000 |
Complete |
245,000 |
|
|
Bal. |
75,000 |
|
|
Overhead |
|
138,500 |
|
140,000 |
|
|
Bal. |
1,500 |
Cost of Goods Sold |
|
210,000 |
|
|
Job 32 was the only job in process at the end of the first
quarter. A total of 1,000 direct labor hours at $10 per hour were
charged to Job 32.
|
Required: |
1. |
Assuming that overhead is
applied on the basis of direct labor cost, what was the overhead
rate used during the first quarter of the year? |
2. |
What was the applied overhead
for the first quarter? The actual overhead? The under- or
overapplied overhead? |
3. |
What was the cost of the goods
manufactured for the quarter? |
4. |
Assume that the overhead
variance is closed to the cost of goods sold account. Prepare the
journal entry to close out the overhead control account on March
31. Refer to the Chart of Accounts for account titles. What is the
adjusted balance in Cost of Goods Sold? |
5. |
For Job 32, identify the costs
incurred for direct materials, direct labor, and
overhead. |