BlueJays Inc. manufactures softball/baseball gloves. They use leather (direct material), glue (indirect material) and labor (direct). The glue gets lumped in with all other manufacturing overhead costs throughout the year. At the beginning of the year, management determined the following: Budgeted Total Overhead $350,000 Cost Base Machine Hours Machine Hours 50,000 Leather per Glove $10.00/Glove 01/01/2020 Balances BOY Leather $20,000 BOY WIP $15,000 BOY Finished Goods $27,000 BOY COGS $0 At the end of the year, BlueJays produced 55,000 finished gloves, using $495,000 of leather and $434000 of overhead, including the glue. In the process, they used 52,000 machine hours. Their end of year balances are as follows: 12/31/2020 Balances EOY Leather $12,000 EOY WIP $17,000 EOY Finished Goods $20,000 EOY COGS ???????? 12/31/2020 MOH Balances EOY Leather $0 EOY WIP $8,000 EOY Finished Goods $11,000 EOY COGS $345,000 REQUIRED: a) Calculate the total allocated b) Using the following information combined with the already provided information, calculate COGS before any adjusting entries: Direct Materials purchased during the year: $485000 Direct Labor used during the year: $600,000 c) Close the MOH-Control and MOH-Allocated accounts using the "write-off" to COGS approach. Show all journal entries d)Close the MOH-Control and MOH-Allocated accounts using the proration - ending account balances approach. Show all journal entries.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
BlueJays Inc. manufactures softball/baseball gloves. They use leather (direct material), glue (indirect material) and labor (direct). The glue gets lumped in with all other
|
Budgeted |
|
|
Total Overhead |
$350,000 |
|
Cost Base |
Machine Hours |
|
Machine Hours |
50,000 |
|
Leather per Glove |
$10.00/Glove |
|
01/01/2020 Balances |
|
|
BOY Leather |
$20,000 |
|
BOY WIP |
$15,000 |
|
BOY Finished Goods |
$27,000 |
|
BOY COGS |
$0 |
At the end of the year, BlueJays produced 55,000 finished gloves, using $495,000 of leather and $434000 of overhead, including the glue. In the process, they used 52,000 machine hours. Their end of year balances are as follows:
|
12/31/2020 Balances |
|
|
EOY Leather |
$12,000 |
|
EOY WIP |
$17,000 |
|
EOY Finished Goods |
$20,000 |
|
EOY COGS |
???????? |
|
12/31/2020 MOH Balances |
|
|
EOY Leather |
$0 |
|
EOY WIP |
$8,000 |
|
EOY Finished Goods |
$11,000 |
|
EOY COGS |
$345,000 |
REQUIRED:
- a) Calculate the total allocated
- b) Using the following information combined with the already provided information, calculate COGS before any
adjusting entries :
Direct Materials purchased during the year: $485000
Direct Labor used during the year: $600,000
- c) Close the MOH-Control and MOH-Allocated accounts using the "write-off" to COGS approach. Show all
journal entries
d)Close the MOH-Control and MOH-Allocated accounts using the proration - ending account balances approach. Show all journal entries.
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