Processinventory 210000

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Manufacturing overhead applied to work in  process inventory ...............................................   210,000     Total manufacturing costs .................................... 430,000 Add: Beginning work in process inventory ...........       5,000       435,000 Deduct: Ending work in process inventory ...........       20,000     Cost of goods manufactured ................................ $415,000 2. Cost of Goods Sold Finished goods inventory, beginning .................... $ 70,000 Add: Cost of goods manufactured .......................   415,000     Cost of goods available for sale ........................... 485,000 Deduct: Finished goods inventory, ending ...........     25,000     Unadjusted cost of goods sold ............................. 460,000 Add: Underapplied overhead ...............................     10,000     Adjusted cost of goods sold ................................. $470,000     3. Eccles Company Income Statement Sales ................................................................. $643,000 Cost of goods sold ($460,000 + $10,000) .........   470,000     3- 11
Chapter 3 Job-Order Costing Gross margin .................................................... 173,000 Selling and administrative expenses: 3- 12
Chapter 3 Job-Order Costing Selling expenses ............................................. $100,00 0 Administrative expense ...................................     43,000         143,000     Net operating income ......................................... $        30,000     3- 13
Chapter 3 Job-Order Costing Exercise 3-9  (10 minutes) Yes, overhead should be applied to value the Work in Process inventory at  year-end. Because $15,000 of overhead was applied to Job X on the basis of $10,000  of direct labor cost, the company’s predetermined overhead rate must be  150% of direct labor cost. Job Q direct labor cost .......................................................... $8,000 ×  Predetermined overhead rate ............................................ ×      150%     = Manufacturing overhead applied to Job Q at year-end ...... $12,000 Exercise 3-10  (10 minutes) Direct material ............................... $12,000 Direct labor ................................... 8,000 Manufacturing overhead applied: $8,000  ×  120% ...........................       9,600     Total manufacturing cost ............... $29,600 Unit product cost: $29,600  ÷  200 units ................... $148 Exercise 3-11  (30 minutes) 1. a. Raw Materials Inventory ............................ 210,000 Accounts Payable ................................... 210,000 b. Work in Process ........................................ 152,000 Manufacturing Overhead ........................... 38,000 Raw Materials Inventory ......................... 190,000 c. Work in Process ........................................ 49,000 Manufacturing Overhead ........................... 21,000 Salaries and Wages Payable .................. 70,000 3- 14
Chapter 3 Job-Order Costing d. Manufacturing Overhead ........................... 105,000 Accumulated Depreciation ...................... 105,000 e. Manufacturing Overhead ........................... 130,000 Accounts Payable ................................... 130,000 3- 15
Chapter 3 Job-Order Costing f. Work in Process ........................................ 300,000 Manufacturing Overhead ........................ 300,000 75,000 machine-hours  ×  $4 per machine-hour =  $300,000. g. Finished Goods ......................................... 510,000 Work in Process ..................................... 510,000 h. Cost of Goods Sold ................................... 450,000 Finished Goods ...................................... 450,000 Accounts Receivable ................................. 675,000 Sales ...................................................... 675,000 $450,000  ×  1.5 = $675,000. 2. Manuf acturin Overh ead Work in Process (b) 38,00 0 (f) 300,0 00 Bal. 35,00 0 (g) 510,00 0 (c) 21,000 (b) 152,0 00 (d) 105,0 00 (c) 49,00 0 (e) 130,0 00 (f) 300,0 00 6,000 Bal. 26,00 0 (Overapplied  overhead) 3- 16
Chapter 3 Job-Order Costing Exercise 3-12  (20 minutes) 1. The estimated total manufacturing overhead cost is computed as  follows: Y = $750,000 + $4.00 per MH  ×  150,000 MHs Estimated fixed manufacturing overhead .................. $  750,000 Estimated variable manufacturing overhead $4.00 per MH  ×  150,000 MHs .................................         600,000     Estimated total manufacturing overhead cost ............ $1,350,000 The predetermined overhead rate is computed as follows: Estimated total manufacturing overhead ...... $1,350,000 ÷  Estimated total machine-hours (MHs) ....... 150,000 MHs = Predetermined overhead rate .................... $9.00 per MH 2. Total manufacturing cost assigned to Job 500: Direct materials .................................. $350 Direct labor ........................................ 230 Manufacturing overhead applied  $9.00 per MH  ×  30 MHs .................   270     Total manufacturing cost .................... $850 3. Computing underapplied/overapplied overhead:  Actual manufacturing overhead (a) ....... $1,325,000 Actual machine-hours ............................ 147,000 ×  Predetermined overhead rate .............        $9.00 = Manufacturing overhead applied (b)... $1,323,000

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