ECON1132 Chapter Notes -Barter
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5. The income approach The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars.
National income can also be calculated based on disposable income. Use the following table to derive personal income and national income (in billions of dollars). Specify what needs to be added to disposable income to arrive at personal income, and explain how personal income should be adjusted to find national income.
National income is the total amount earned by the citizens of a country, while gross domestic product is the total value of goods and services produced within a country. To determine the gross domestic product, you have to make some adjustments to national income. Use the following table to derive gross domestic product and, as part of the process, net domestic product (NDP) (in billions of dollars). Again, specify what should be added to and subtracted from national income to arrive at the net domestic product, and what should be added to the net domestic product to arrive at the gross domestic product.
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P23-6B Journalize and post standard cost entries, and prepare income statement | |||||||||
Frio Company uses standard costs with its job order cost accounting system. | |||||||||
In January, an order (Job No. 84) was received for 5,500 units of Product D . The standard | |||||||||
cost of one unit of Product D is as follows. | |||||||||
Direct materials | 1.5 pounds at $4.00 per pound | $6.00 | |||||||
Direct labor | 1 hour at $9.00 per hour | 9.00 | |||||||
Overhead | 1 hour (variable $7.40; fixed $8.00 | 15.40 | |||||||
Standard cost per unit | $30.40 | ||||||||
Overhead is applied on the basis of direct labor hours. Normal capacity for the month | |||||||||
of January was 6,000 direct labor hours. During January, the following transactions | |||||||||
applicable to Job No, 48 occurred. | |||||||||
1. Purchased 8,100 pounds of raw materials on account at $3.70 per pound. | |||||||||
2. Requisitioned 8,100 pounds of raw materials for production. | |||||||||
3. Incurred 5,200 hours of direct labor at a rate of $9.20 per hour. | |||||||||
4. Worked 5,200 hours of direct labor on Job No.84. | |||||||||
5. Incurred $87,500 of manufacturing overhead on account. | |||||||||
6. Applied overhead to Job No. 84 on basis of direct labor hours. | |||||||||
7. Transferred Job NO. 84 to finished goods. | |||||||||
8. Billed customer for Job No. 84 at a selling price of $270,000. | |||||||||
Instructions | |||||||||
(a) Journalize the transactions. | |||||||||
(b) Post to the job order cost accounts. | |||||||||
(c ) Prepare the entry to recognize the total overhead variance. | |||||||||
(d) Prepare the January 2014 income statement for management. Assume selling and | |||||||||
administrative expenses were $60,000. | |||||||||
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . | |||||||||
(a)(1) | Account | Value | |||||||
Account | Value | ||||||||
Account | Value | ||||||||
(a)(2) | Account | Value | |||||||
Account | Value | ||||||||
Account | Value | ||||||||
(a)(3) | Account | Value | |||||||
Account | Value | ||||||||
Account | Value | ||||||||
(a)(4) | Account | Value | |||||||
Account | Value | ||||||||
Account | Value | ||||||||
(a)(5) | Account | Value | |||||||
Account | Value | ||||||||
(a)(6) | Account | Value | |||||||
Account | Value | ||||||||
(a)(7) | Account | Value | |||||||
Account | Value | ||||||||
(a)(8) | Account | Value | |||||||
Account | Value | ||||||||
Account | Value | ||||||||
Account | Value | ||||||||
(b) | Raw Materials Inventory | Materials Price Variance | Work in Process Inventory | ||||||
Value | Value | Value | Value | Value | |||||
Value | |||||||||
Value | |||||||||
Factory Labor | Materials Quantity Variance | Finished Goods Inventory | |||||||
Value | Value | Value | Value | Value | |||||
Manufacturing Overhead | Labor Price Variance | Cost of Goods Sold | |||||||
Value | Value | Value | Value | ||||||
Labor Quantity Variance | |||||||||
Value | |||||||||
(c ) | Account | Value | |||||||
Account | Value | ||||||||
(d) | FRIO COMPANY | ||||||||
Income Statement | |||||||||
For the Month Ended January 31, 2014 | |||||||||
Sales revenue | Value | ||||||||
Cost of goods sold (at standard) | Value | ||||||||
Gross profit (at standard) | Value | ||||||||
Variances | |||||||||
Material price | Value | ||||||||
Materials quantity | Value | ||||||||
Labor price | Value | ||||||||
Labor quantity | Value | ||||||||
Overhead | Value | ||||||||
Total variance - favorable | Value | ||||||||
Gross profit (actual) | Value | ||||||||
Selling and administrative expenses | Value | ||||||||
Net income | Value | ||||||||