topic 5 - 1 2 SOLUTION TO 439 Allocation and proration of...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2
Background image of page 2
 SOLUTION TO 4-39 Allocation and proration of manufacturing overhead. 1. $252,000 $420,000 = $0.60 per direct manufacturing labour dollar The Work-in-Process inventory breakdown at the end of 2007 for Jobs 1768B and 1819C is: Job 1768B Job 1819C Total Direct materials (given) Direct manufacturing labour (given) Manufacturing overhead allocated, 60% × DL$ Total manufacturing costs $22,000 11,000 6,600 $39,600 $ 42,000 39,000 23,400 $104,400 $ 64,000 50,000 30,000 $144,000 The finished goods inventory at the end of 2007 is $156,000 (given). A direct manufacturing labour cost of $40,000 implies a budgeted manufacturing overhead costs component of $24,000. The COGS is $1,600,000 (given). The total direct manufacturing labour of $400,000 implies direct manufacturing labour in COGS of $310,000 ($400,000 – $11,000 – $39,000 – $40,000). Hence, manufacturing overhead allocated in COGS is 60% × $310,000 = $186,000. Direct materials in COGS is $1,104,000 ($1,600,000 – $310,000 – $186,000). The summary account information is as follows: Direct Materials Direct Manufacturing Labour Manufacturing Overhead Allocated Total Work in process Finished goods Cost of goods sold Total $ 64,000 92,000 1,104,000 $1,260,000 $ 50,000 40,000 310,000 $400,000 $ 30,000 24,000 186,000 $240,000 $ 144,000 156,000 1,600,000 $1,900,000 2. = = $240,000 – $186,840 = $53,160 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3a. Account Account Balance (Before Proration) (1) Proration of $53,160 Overallocated Manuf. Overhead (2) End-of-Year Balance (After Proration) (3)=(1)+(2) Work in process Finished goods Cost of goods sold Total $ 144,000 (144/1,900 = 7.58%) 156,000 (156/1,900 = 8.21%) 1,600,000
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/07/2009 for the course ACCT 2102 taught by Professor Unknown during the Three '08 term at Queensland.

Page1 / 11

topic 5 - 1 2 SOLUTION TO 439 Allocation and proration of...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online