Sheree_JohnsonII_BUS340_Assignemnt3

9 finished goods inventory 625400 goods in process

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9. Finished Goods Inventory .......................................................... 625,400 Goods in Process Inventory ................................................. 625,400 To record completion of jobs. 10. Cost of Goods Sold .................................................................... 652,800 Finished Goods Inventory .................................................... 652,800 To record cost of sales of jobs. Cash ............................................................................................ 1,400,000 Sales ..................................................................................... .................................................................................................... 1,400,000 To record sale of jobs. 11. Cost of Goods Sold .................................................................... 29,500
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Exercise 19-5 Overhead rate calculation, allocation, and analysis 1. Overhead rate = Total overhead costs / Total direct labor costs = $1,800,000 / $3,000,000 = 60% 2. Total cost of goods in process inventory ..................................................... $ 71,000 Deduct: Direct labor ..................................................................................... (20,000) Deduct: Factory overhead ($20,000 x 60%) ................................................ (12,000 ) Direct materials ............................................................................................ $ 39,000 3. Total cost of finished goods inventory ........................................................ $490,000 Deduct: Direct materials ............................................................................. (250,000 ) Direct labor and factory overhead costs ...................................................... $240,000 We also know that the total of direct labor costs ( X ) and factory overhead costs (0.6 X ) equals $240,000. Thus, to get the individual amounts we need to solve: [ X + 0.6 X = $240,000]. The solution is: Direct labor costs = $150,000 Factory overhead costs = $150,000 x .6 = $90,000
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