Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $246,400 of manufacturing overhead for an estimated allocation base of $154,000 direct material dollars.
a. Raw materials purchased $151,000.
b. Raw materials requisitioned for use in production (all direct materials), $143,000.
c. Utility bills incurred in the factory, $24,000.
d. Costs for salaries and wages were incurred as follows:
Direct labor $219,000
Indirect labor $98,100
Selling and administrative salaries $144,000
e. Maintenance costs incurred in the factory, $19,000.
f. Advertising costs incurred $124,000.
g. Depreciation recorded for the year, $45,000 (70% relates to factory assets, and the remainder relates to selling and administrative assets).
h. Rental cost incurred on buildings, $85,000 (70% of the space is occupied by the factory, and 30% is occupied by sales and administration).
i. Miscellaneous selling and administrative costs incurred $12,000.
j. Manufacturing overhead cost was applied to jobs, $?
k. Cost of goods manufactured for the year, $553,000.
l. Sales for the year (all on account) totaled $1,500,000. These goods cost $510,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were as follows:
Prepare a schedule of cost of goods manufactured
Raw materials $20,000
Work in process $24,000
Finished Goods $32,000
1. Prepare journal entries to record the above data.
2 Post your entries to T-accounts. Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account
3 Prepare a schedule of cost of goods manufactured.
4 Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold
5 Prepare an income statement for the year.
6 Job 218 was one of the many jobs started and completed during the year. The job required $3,300 in direct materials and 500 hours of direct labor time at a rate of $11 per hour. If the job contained 560 units and the company billed at 65% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer
Click here for the SOLUTION