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Selected information from Skybox Studios shows the following:
Raw Material Purchased $5,000
Direct Materials $1,500
Direct Labor $11,000
Factory
Total Manufacturing
Machine Hours Per Month 28,000
Unit Cost for Materials $2
Unit Cost of Conversation $8
Number units transferred 15,000
Prepare
a. Raw material purchased
b. Direct labor incurred
c.Depreciation expense (hint: this is part of manufacturing overhead)
d. Raw materials used
e. Overhead applied on the basis of $0.50 per machine hour
f.The transfer from department 1 to department 2
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Meaning of Cost Accounting System :-
The Cost Accounting system is meant for simplifying the work of the manufacturers, who need to track the flow of inventory on a continuous basis through various stages of production. Cost accounting is one of the parts of management accounting that determines the actual cost associated with manufacturing a product. It is done for the purpose of budget preparation and profitability analysis. The information derived from this process is useful to managers in determining which products, departments or services are most profitable and which ones need improvement.
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- The cost of materials transferred into the Rolling Department of Keystone Steel Company is $590,700 from the Casting Department. The conversion cost for the period in the Rolling Department is $109,500 ($65,500 factory overhead applied and $44,000 direct labor). The total cost transferred to Finished Goods for the period was $687,200. The Rolling Department had a beginning inventory of $29,200. a1. Journalize the cost of transferred-in materials. a2. Journalize the conversion costs. If an amount box does not require an entry, leave it blank. a3. Journalize the costs transferred out to Finished Goods. b. Determine the balance of Work in Process—Rolling at the end of the period.arrow_forwardUse the following information for the Exercises below. (Static) [The following information applies to the questions displayed below.] Note: Assume all raw materials were used as direct materials. Inventories Raw materials inventory Work in process inventory Finished goods inventory Activity during current year Raw materials purchased Direct labor Factory overhead Beginning of Year End of Year $ 6,000 12,000 8,000 $ 123,000 94,000 39,000 Cost of Direct Material Used is Computed as: $ 7,000 9,000 5,000 QS 14-16 (Static) Computing direct materials used LO P2 Compute the cost of direct materials used for the current year.arrow_forwardThe following information is available for Robstown Corporation for 20Y8: Inventories January 1 December 31 Materials $78,750 $94,450 Work in process 108,600 96,800 Finished goods 113,750 109,100 December 31 Advertising expense $ 69,000 Depreciation expense-office equipment 22,750 Depreciation expense-factory equipment 14,860 Direct labor 184,350 Heat, light, and power-factory 5,950 Indirect labor 24,600 Materials purchased 122,200 Office salaries expense 77,750 Property taxes-factory 4,170 Property taxes-office building 13,200 Rent expense-factory 6,675 Sales 862,000 Sales salaries expense 138,500 Supplies-factory 5,000 Miscellaneous costs-factory 5,280 Required: a. Prepare the 20Y8 statement of cost of goods manufactured. For those boxes in which you must enter subtracted or negative numbers use a minus sign.* b. Prepare the 20Y8 income statement. *Refer to the Amount Descriptions list…arrow_forward
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