In: Economics
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold and Income Statement;
this ie the jouranl entries
Pre-determined manufacturing overhead rate = Total estimated manufacturing overheads / Estimated direct labor hours = = $3600/12 hours = $300 per direct labor hour
Step 2:
| Cost Sheet | ||
| Job # 1 | ||
| Direct materials $ | ||
| Table top | 2000 | |
| Legs ($650 x 4) | 2600 | |
| Drawer | 0 | 4600 |
| Direct labor cost @ $20 per hour | (3x2x$30) | 180 |
| Manufacturing overheads $ | (3x2x$300) | 1800 |
| Total manufacturing cost $ | 6580 | |
Step 3:
| Cost Sheet | ||
| Job # 2 | ||
| Direct materials $ | ||
| Table top | 2000 | |
| Legs ($650 x 4) | 2600 | |
| Drawer | 400 | 5000 |
| Direct labor cost @ $20 per hour | (3 x 1 x $30) | 90 |
| Manufacturing overheads $ | (3 x 1 x $300) | 900 |
| Total manufacturing cost $ | 5990 | |
Step 4:
| Date | Account Titles and Explanation | Debit | Credit |
| 01-Dec | Raw Materials | 20000 | |
| Accounts Payable | 20000 | ||
| (To record raw materials purchased on account) | |||
| 05-Dec | Work in process - Job # 1 | 4600 | |
| Raw Materials | 4600 | ||
| (To record raw materials requisitioned for Job # 1) | |||
| 10-Dec | Work in process - Job # 1 (3 x 2 hours x $30) | 180 | |
| Salaries and Wages payable | 180 | ||
| (To record direct labor cost incurred) | |||
| 10-Dec | Manufacturing overhead | 3000 | |
| Salaries and Wages payable | 3000 | ||
| (To record Factory Supervisor salary incurred) | |||
| 10-Dec | Salaries and Wages expense | 2000 | |
| Salaries and Wages payable | 2000 | ||
| (To record administrative salary incurred) | |||
| 15-Dec | Work in process - Job # 2 | 5000 | |
| Raw Materials | 5000 | ||
| (To record raw materials requisitioned for Job # 2) | |||
| 16-Dec | Manufacturing overhead | 500 | |
| Accounts Payable | 500 | ||
| (To record rent for factory building payable) | |||
| 17-Dec | Advertising expense | 1400 | |
| Accounts Payable | 1400 | ||
| (To record advertising expense payable) | |||
| 20-Dec | Manufacturing overhead (factory equip.) | 150 | |
| Depreciation expense (S&A equip.) | 600 | ||
| Accumulated Depreciation | 750 | ||
| (To record depreciation expense) | |||
| 22-Dec | Work in process - Job # 1 (2 x 3 hour x $300) | 1800 | |
| Manufacturing overhead | 1800 | ||
| (To record manufacturing OH applied to Job # 1) | |||
| 26-Dec | Finished goods | 6580 | |
| Work in process - Job # 1 | 6580 | ||
| (To record cost of Job # 1 completed and transferred to FG) | |||
| 28-Dec | Accounts Receivable | 25000 | |
| Sales Revenue | 25000 | ||
| (To record sale on account) | |||
| 28-Dec | Cost of goods sold | 6580 | |
| Finished goods | 6580 | ||
| (To record cost of sales) | |||
| Sale of Job # 1 | |||
| 31-Dec | Work in process - Job # 2 (3 x 1 hour x $30) | 90 | |
| Salaries and Wages payable | 90 | ||
| (To record direct labor cost incurred) | |||
| 31-Dec | Work in process - Job # 2 (3 x 1 hour x $300) | 900 | |
| Manufacturing overhead | 900 | ||
| (To record manufacturing OH applied to Job # 2) | |||
| 31-Dec | Cost of goods sold | 950 | |
| Manufacturing overhead | 950 | ||
| (To close underapplied overheads) |
answering these questions :
| What is the ending balance for raw materials? | ||||
| 1. What is the ending balance for work in process? | ||||
| 2. What is the ending balance for finished goods? | ||||
| 3. What is the actual manufacturing overhead cost incurred during December before adjustment? | ||||
| 4. What is the total applied manufacturing overhead cost during December before adjustment? | ||||
| 5. What is the unadjusted cost of goods sold? | ||||
| 6. Was the manufacturing overhead for the month of December overapplied/underapplied ? | ||||
| 7. What is the amount of Manufacturing overhead overapplied/underapplied? | ||||
| 8. What is the adjusted cost of goods sold? | ||||
| 9. What is gross margin? | ||||
| 10. What is the total prime cost for Job#1? | ||||
| 11. What is the total conversion cost for job #1? | ||||
| 12. What is the total product cost for job#1? | ||||
| 13. What was the period cost incurred for the month of December? | ||||
| 14. What is the total variable cost incurred for Job #1(assume that all selling and administrative cost and all manufacturing overhead costs are fixed.)? | ||||
| 15. What is the contribution margin for Job #1 (assume that all selling and administrative cost and all manufacturing overhead costs are fixed.)? | ||||
| 16. What would be the actual (not applied) total fixed manufacturing overhead cost incurred for the company for the month if the order in Job #1 is for five tables instead of one table assuming this cost is with in the relevant range? | ||||
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