Concept explainers
The following data (in thousands) pertain to 2017:
Direct materials and supplies purchased on credit | $800 |
Direct materials used | 710 |
Indirect materials issued to various production departments | 100 |
Direct manufacturing labor | 1,300 |
Indirect manufacturing labor incurred by various production departments | 900 |
Depreciation on building and manufacturing equipment | 400 |
Miscellaneous manufacturing overhead* incurred by various production departments (ordinarily would be detailed as repairs, photocopying, utilities, etc.) | 550 |
Manufacturing overhead allocated at 160% of direct manufacturing labor costs | ? |
Cost of goods manufactured | 4,120 |
Revenues | 8,000 |
Cost of goods sold (before adjustment for under- or overallocated manufacturing overhead) | 4,020 |
Inventories, December 31, 2016 (not 2017): | |
Materials Control | 100 |
Work-in-Process Control | 60 |
Finished Goods Control | 500 |
*The term manufacturing overhead is not used uniformly. Other terms that are often encountered in printing companies include job overhead and shop overhead.
- 1. Prepare an overview diagram of the job-costing system at the University of Chicago Press.
Required
- 2. Prepare journal entries to summarize the 2017 transactions. As your final entry, dispose of the year-end under- or overallocated manufacturing overhead as a write-off to Cost of Goods Sold. Number your entries. Explanations for each entry may be omitted.
- 3. Show posted T-accounts for all inventories, Cost of Goods Sold, Manufacturing Overhead Control, and Manufacturing Overhead Allocated.
- 4. How did the University of Chicago Press perform in 2017?
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Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
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