ACC 330 Lecture Notes - Lecture 10: Finished Good, Sensitivity Analysis, Financial Statement
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Dacosta Corporation had only one job in process on May 1. Thejob had been charged with $2,300 of direct materials, $6,966 ofdirect labor, and $10,076 of manufacturing overhead cost. Thecompany assigns overhead cost to jobs using the predeterminedoverhead rate of $19.40 per direct labor-hour.
During May, the following activity was recorded:
Raw materials (all directmaterials): | ||
Beginning balance | $ | 9,000 |
Purchased during the month | $ | 38,500 |
Used in production | $ | 39,800 |
Labor: | ||
Direct labor-hours worked duringthe month | 2,400 | |
Direct labor cost incurred | $ | 25,010 |
Actual manufacturing overheadcosts incurred | $ | 33,800 |
Inventories: | ||
Raw materials, May 30 | ? | |
Work in process, May 30 | $ | 17,067 |
Work in process inventory on May 30 contains $3,831 of directlabor cost. Raw materials consist solely of items that areclassified as direct materials.
The cost of goods manufactured for May was:
Christopherâs Custom Cabinet Company uses a job order costsystem with overhead applied as a percentage of direct labor costs.Inventory balances at the beginning of 2013 follow: |
Raw materialsinventory | $ | 16,000 |
Work in processinventory | 6,300 | |
Finished goodsinventory | 20,700 | |
The following transactionsoccurred during January: |
(a) | Purchased materials on accountfor $27,200. |
(b) | Issued materials to production totaling $20,900, 90 percent ofwhich was traced to specific jobs and the remainder of which wastreated as indirect materials. |
(c) | Payroll costs totaling $16,900were recorded as follows: |
$11,500for assembly workers | |
1,100 for factorysupervision | |
1,800 for administrativepersonnel | |
2,500for sales commissions | |
(d) | Recorded depreciation: $5,600for machines, $500 for the copier used in the administrativeoffice. |
(e) | Recorded $1,400 of expired insurance. Forty percent wasinsurance on the manufacturing facility, with the remainderclassified as an administrative expense. |
(f) | Paid $4,600 in other factorycosts in cash. |
(g) | Applied manufacturing overheadat a rate of 200 percent of direct labor cost. |
(h) | Completed all jobs but one; the job cost sheet for this jobshows $2,500 for direct materials, $2,300 for direct labor, and$4,600 for applied overhead. |
(i) | Sold jobs costing $51,000. The revenue earned on these jobs was$66,300. |
Required: | |
1. | Set up T-accounts, record the beginning balances, post theJanuary transactions, and compute the final balance for thefollowing accounts: |
a. | Raw Materials Inventory. |
b. | Work in Process Inventory. |
c. | Finished Goods Inventory. |
d. | Cost of Goods Sold. |
e. | Manufacturing Overhead. |
f. | Selling, General, andAdministrative Expenses. |
g. | Sales Revenue. |
h. | Other accounts (Cash, Payables,etc.). |
Meyers Corporation had the following inventory balances at thebeginning and end of November:
November 1 | November 30 | ||||
RawMaterials | $ | 24,000 | $ | 22,000 | |
Finished Goods | $ | 66,000 | $ | 45,000 | |
Work in Process | $ | 13,000 | $ | 15,000 | |
During November, $51,000 in raw materials (all direct materials)were drawn from inventory and used in production. The company'spredetermined overhead rate was $10 per direct labor-hour, and itpaid its direct labor workers $11 per hour. A total of 300 hours ofdirect labor time had been expended on the jobs in the beginningWork in Process inventory account. The ending Work in Processinventory account contained $6,000 of direct materials cost. TheCorporation incurred $36,000 of actual manufacturing overhead costduring the month and applied $33,000 in manufacturing overheadcost. |
The actual direct labor-hours worked during November totaled:(Round your answers to the nearest dollar.) |