39 costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning balance Ending balance Raw materials $ 22,000 $ 25,000 Work in process $52,000 $ 34,000 Finished goods $121,000 $ 136,000 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 40,000 machine-hours and incur $200,000 in manufacturing overhead cost. 39 Activity 2 The following transactions were recorded for the year: •Raw materials were purchased, $412,000. •Raw materials were requisitioned for use in production, $409,000 $(362,000 direct and $47,000 indirect). •The following employee costs were incurred: direct labor, $324,000; indirect labor, $57,000; and administrative salaries, $129,000. Selling costs, $135,000. •Factory utility costs, $22,000. Depreciation for the year was $102,000 of which $94,000 is related to factory operations and $8,000 is related to selling, general, and administrative activities. •Manufacturing overhead was applied to jobs. The actual level of activity for the year was 44,000 machine-hours. •Sales for the year totaled $1,198,000. • Actual M.O.H.C equals to Predetermined/Applied M.O.H.C Required: 1) Prepare the summary journal entries to record the distribution of materials, labor, and overhead costs. 2) Prepare a schedule of cost of goods manufactured in good form. 3) Prepare an income statement for the year in good form.
39 costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning balance Ending balance Raw materials $ 22,000 $ 25,000 Work in process $52,000 $ 34,000 Finished goods $121,000 $ 136,000 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 40,000 machine-hours and incur $200,000 in manufacturing overhead cost. 39 Activity 2 The following transactions were recorded for the year: •Raw materials were purchased, $412,000. •Raw materials were requisitioned for use in production, $409,000 $(362,000 direct and $47,000 indirect). •The following employee costs were incurred: direct labor, $324,000; indirect labor, $57,000; and administrative salaries, $129,000. Selling costs, $135,000. •Factory utility costs, $22,000. Depreciation for the year was $102,000 of which $94,000 is related to factory operations and $8,000 is related to selling, general, and administrative activities. •Manufacturing overhead was applied to jobs. The actual level of activity for the year was 44,000 machine-hours. •Sales for the year totaled $1,198,000. • Actual M.O.H.C equals to Predetermined/Applied M.O.H.C Required: 1) Prepare the summary journal entries to record the distribution of materials, labor, and overhead costs. 2) Prepare a schedule of cost of goods manufactured in good form. 3) Prepare an income statement for the year in good form.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter26: Manufacturing Accounting: The Job Order Cost System
Section: Chapter Questions
Problem 2SEB: SCHEDULE OF COST OF GOODS MANUFACTURED The following information is supplied for Sanchez Welding and...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,