Total Raw Materials Available 70000 Less Raw Materials End Inv 15000 Raw

Total raw materials available 70000 less raw

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Total Raw Materials Available 70,000 Less: Raw Materials – End. Inv. <15,000 > Raw Materials Used in Production $ 55,000 Direct Labor 50,000 Manufacturing OH Applied 100,000 Total Manufacturing Costs 205,000 Add: WIP – Beg. Inv. 30,000 235,000 Less: WIP – End. Inv. <75,000 > Cost of Goods Manufactured $ 160,000
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Step #2 – Cost of Goods Sold Finished Goods – Beg. Inventory $ 10,000 Add: Cost of Goods Manufactured 160,000 Cost of Goods Available 170,000 Less: Finished Goods – Ending Inventory <50,000 > Unadjusted Cost Goods Sold $ 120,000 Less: Manufacturing OH - Overapplied <5,000 > Adjusted Cost of Goods Sold $ 115,000 Note: Manufacturing Overhead Account Debit aka Actual OH Credit aka Applied 95,000 100,000 ← Actual Hours @ OH Rate 5,000 ← Over applied Journal Entry to close out Manufacturing OH Manufacturing OH 5,000 Cost of Goods Sold 5,000
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Step #3 – Prepare Income Statement – Brewer Precision Company Income Statement For the Year Ended December 31, 2015 Sales $ 300,000 Less: Cost of Goods Sold <115,000 > Gross Profit (Margin) 185,000 Less: Selling & Administrative Expenses Salaries Expense $ 30,000 Depreciation Expense 10,000 Advertising Expense 40,000 Other Expenses 10,000 <90,000 > Net Operating Income $ 95,000
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Multiple Choice Questions: Please answer in the space provided. ________     1.      During the month of January, direct labor cost totaled $17,000 and direct labor cost was 60% of prime cost. If total manufacturing costs during January were $82,000, the manufacturing overhead was: A) $11,333 B) $53,667 C) $28,333 D) $65,000 Answer: B Prime Costs = Direct Labor + Direct Materials Prime Costs = 17,000 + .4 Prime Costs .6 Prime Costs = 17,000 Prime Costs = 28,333 Mfg Costs = Prime Costs + Mfg OH 82,000 = 28,333 + Mfg OH 53,667 = Mfg OH ________     2.      Fab Co. manufactures textiles. Fab’s manufacturing costs last year included the following salaries and wages: What is the amount of direct labor included in this list? A) $195,000 B) $165,000 C) $150,000 D) $120,000 Answer: D
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Description Direct Labor Factory OH Loom Operator $ 120,000 $ 0 Foreman 0 45,000 Repairmen 0 30,000 Total $ 120,000 $ 75,000 ________     3.      Last month a manufacturing company had the following operating results: What was the cost of goods manufactured for the month? A) $371,000 B) $459,000 C) $383,000 D) $377,000 Answer: A Sales - CGS = Gross Margin 465,000 - CGS = 88,000 377,000 = CGS Beg Bal. – FG + CGM - End Bal – FG = CGS 72,000 + CGM - 66,000 = 377,000 CGM = 377,000 – 6,000 CGM = 371,000 _________     4.      Which of the following industries would be most likely to use a process costing system? A) Ship builder B) Movie studio C) Oil refinery D) Hospital Answer: C
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__________     5.      Which of the following entries would record correctly the application of overhead cost? A) A Above B) B Above C) C Above D) D Above Answer: D WIP Inventory XXX Mfg OH XXX __________ 6. Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs: A) started in process during the period. B) in process during the period. C) completed and sold during the period. D) completed during the period. Answer: D Jobs completed during period __________    7.      Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,800 hours and the total estimated
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manufacturing overhead was $497,040. At the end of the year, actual direct labor-hours for the year were
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