Exercise 3-6 30 minutes 1 Mason Company’s schedule of...

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Exercise 3-1 (10 minutes) a. Raw Materials ..................... 80,000 Accounts Payable ........... 80,000 b. Work in Process ................... 62,000 Manufacturing Overhead .... 9,000 Raw Materials ................ 71,000 c. Work in Process ................... 101,000 Manufacturing Overhead .... 11,000 Cash ............................... 112,000 d. Manufacturing Overhead .... 175,000 Accumulated Depreciation .................. 175,000 Exercise 3-3 (20 minutes) 1 . Schedule of Cost of Goods Manufactured: Direct materials: Beginning raw materials inventory ......... $12,00 0 Add: Purchases of raw materials ............ 30,000 Total raw materials available .................. 42,000 Deduct: Ending raw materials inventory 18,000 Raw materials used in production .......... 24,000 Less indirect materials included in manufacturing overhead ...................... 5,000 $ 19,00 0 Direct labor ................................................ 58,000 Manufacturing overhead applied to work in process ..................................................... 87,00 0 Total manufacturing costs .......................... 164,00 0 Add: Beginning work in process inventory.. 56,00 0 220,00 0
Deduct: Ending work in process inventory.. 65,00 0 Cost of goods manufactured ...................... $155,0 00 2 . Schedule of Cost of Goods Sold: Beginning finished goods inventory ........... $ 35,00 0 Add: Cost of goods manufactured .............. 155,00 0 Cost of goods available for sale .................. 190,00 0 Deduct: Ending finished goods inventory... 42,00 0 Unadjusted cost of goods sold .................... 148,00 0 Add: Underapplied overhead ...................... 4,00 0 Adjusted cost of goods sold ........................ $152,0 00
Exercise 3-4 (10 minutes) 1. Manufacturing overhead incurred (a).. $215,000 Actual direct labor-hours ..................... 11,500 × Predetermined overhead rate .......... $18.20 = Manufacturing overhead applied (b) .................................................... $209,300 Manufacturing overhead underapplied (a) – (b) ............................................. $5,700 2. Because manufacturing overhead is underapplied, the journal entry would increase cost of goods sold by $5,700 and the gross margin would decrease by $5,700.
Exercise 3-5 (30 minutes) 1. a. Raw Materials .................................... 210,00 0 Accounts Payable ............................ 210,000 b. Work in Process .................................. 178,00 0 Manufacturing Overhead ................... 12,000 Raw Materials .................................. 190,000 c. Work in Process .................................. 90,000 Manufacturing Overhead ................... 110,00 0 Salaries and Wages Payable ............ 200,000 d. Manufacturing Overhead ................... 40,000 Accumulated Depreciation .............. 40,000 e. Manufacturing Overhead ................... 70,000 Accounts Payable ............................ 70,000 f. Work in Process .................................. 240,00 0 Manufacturing Overhead ................. 240,000 30,000 MH × $8 per MH = $240,000. g. Finished Goods ................................... 520,00 0 Work in Process ............................... 520,000 h. Cost of Goods Sold ............................. 480,00 0 Finished Goods ................................ 480,000 Accounts Receivable .......................... 600,00 0 Sales ............................................... 600,000 $480,000 × 1.25 = $600,000. 2. Manufacturing Overhead Work in Process (b) 12,000 (f) 240,00 Bal 42,000 (g) 520,00
0 . 0 (c) 110,000 (b) 178,000 (d) 40,000 (c) 90,000 (e) 70,000 (f) 240,000 8,000 Bal . 30,000 (Overapplied overhead)
Exercise 3-6 (30 minutes) 1. Mason Company’s schedule of cost of goods manufactured is as follows: Direct materials: Beginning raw materials inventory .......... $ 7 ,000 Add: Purchases of raw materials .............. 118,000 Total raw materials available ................... 125,000 Deduct: Ending raw materials inventory. . 15,000 Raw materials used in production ............ $110,00 0 Direct labor ................................................ 70,000 Manufacturing overhead applied to work in process ................................................ 90,000 Total manufacturing costs .......................... 270,000 Add: Beginning work in process inventory.. 10,000 280,000 Deduct: Ending work in process inventory. 5,000 Cost of goods manufactured ...................... $275,00 0 2. Mason Company’s schedule of cost of goods sold is as follows: Beginning finished goods inventory ..... $ 20,000 Add: Cost of goods manufactured ........ 275,000 Cost of goods available for sale ............ 295,000 Deduct: Ending finished goods inventory ........................................... 35,000 Unadjusted cost of goods sold .............. 260,000 Deduct: Overapplied overhead* ........... 10,000 Adjusted cost of goods sold .................. $250,00 0 * Actual manufacturing overhead cost of $80,000 ‒ Manufacturing overhead applied of $90,000 = Overapplied overhead of $10,000.
Exercise 3-6 (continued) 3.

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