(Total: 15 marks) (1) Comfort, Inc produces custom-made furniture. The company uses a job-order costing system...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
(Total: 15 marks) (1) Comfort, Inc produces custom-made furniture. The company uses a job-order costing system and nomal costing to calculate its cost of goods manufactured. The company's policy is to price its job at cost plus 40% markup. On January 1, 2016, there was only one job (Job 202) in process with accumulated cost of $16,500. The company had the following balances as at January 1, 2016: Direct materials inventory $45,000 Finished goods inventory (for Job 101) $38,000 During the year 2016, the following events occurred: (1) Direct materials were purchased on account for $275,000. (2) Two more jobs were started: Job 303 and Job 404. (3) Direct materials and direct labour costs incurred by all jobs in process during the year 2016 are as follows: Job 202 Job 303 Job 404 Direct materials $180,000 $30,000 $10,000 Direct labour $104,000 $75,000 $12,600 The company incurred $233,500 of actual factory overhead during the year. Overheads are charged to jobs on the basis of 120% of direct labour cost. Estimated direct labour cost for 2016 is $198,000, Jobs 202 and 404 were completed and Jobs 101 and 202 were sold. Required (clearly show all supporting calculations) (a) Calculate the manufacturing cost and price of Job 202. (3 marks) (b) Calculate the amount of over- or under-applied overheads in 2016. How should the over- or under-applied overheads be treated? Explain. (2 marks) (c) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2016 (6 marks) (d) Calculate the ending balance for finished goods (FG) inventory as of December 31, 2016. (2 marks) (e) Show the journal entries to record the transfer of Work in Process to FG and from Finished Goods to Cost of Goods Sold for 2016. (2 marks) (Total: 15 marks) (1) Comfort, Inc produces custom-made furniture. The company uses a job-order costing system and nomal costing to calculate its cost of goods manufactured. The company's policy is to price its job at cost plus 40% markup. On January 1, 2016, there was only one job (Job 202) in process with accumulated cost of $16,500. The company had the following balances as at January 1, 2016: Direct materials inventory $45,000 Finished goods inventory (for Job 101) $38,000 During the year 2016, the following events occurred: (1) Direct materials were purchased on account for $275,000. (2) Two more jobs were started: Job 303 and Job 404. (3) Direct materials and direct labour costs incurred by all jobs in process during the year 2016 are as follows: Job 202 Job 303 Job 404 Direct materials $180,000 $30,000 $10,000 Direct labour $104,000 $75,000 $12,600 The company incurred $233,500 of actual factory overhead during the year. Overheads are charged to jobs on the basis of 120% of direct labour cost. Estimated direct labour cost for 2016 is $198,000, Jobs 202 and 404 were completed and Jobs 101 and 202 were sold. Required (clearly show all supporting calculations) (a) Calculate the manufacturing cost and price of Job 202. (3 marks) (b) Calculate the amount of over- or under-applied overheads in 2016. How should the over- or under-applied overheads be treated? Explain. (2 marks) (c) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2016 (6 marks) (d) Calculate the ending balance for finished goods (FG) inventory as of December 31, 2016. (2 marks) (e) Show the journal entries to record the transfer of Work in Process to FG and from Finished Goods to Cost of Goods Sold for 2016. (2 marks)
Expert Answer:
Answer rating: 100% (QA)
a Price of Job 202 Beginning work in process inventory 16500 Current period cost Direct materials 18... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
Students also viewed these accounting questions
-
The Gonzalez Company uses a job order costing system at its plant in Green Bay, Wisconsin. The plant has a machining department and a finishing department. The company uses two cost driver rates for...
-
The Brinker Company uses a job order costing system at its local plant. The plant has a machining department and a finishing department. The company uses machine hours to allocate machining...
-
1) CWN Company uses a job order costing system and last period incurred $90,000 of actual overhead and $100,000 of direct labor. CWN estimates that its overhead next period will be $65,000. It also...
-
In Exercises 6780, begin by graphing the square root function, f(x) = x. Then use transformations of this graph to graph the given function. h(x)=x + 2-2
-
Prepare a journal entry on July 31 for the withdrawal of $7,250 by Paul Wright for personal use.
-
Use the information given at the start of problem 1. (a) Suppose that autonomous planned spending decreases by 1,000 billion so that Ap = 4,000. Explain if this decrease is the result of increased...
-
What are the elements of cost control?
-
Paul Scott has a 2008 Cadillac that he wants to update with a geo-tracker device so he will have access to road maps and directions. After-market equipment can be fitted for a flat fee of $500, and...
-
The function r(t) = (0, 5 + 4 cos (7t), 4 sin (7t)) traces a circle. Determine the radius, center, and plane containing the circle. (Use symbolic notation and fractions where needed.) radius: ' '...
-
(c) A Michelson interferometer is used to measure the displacement of a linearly moving object. The target mirror is mounted on the moving object. The laser source used in this system is laser diode...
-
Assets Beulah Company Balance Sheets December 31 2014 2013 Beulah Company Income Statement For the Years Ended December 31 Current assets 2014 Cash $ 21,000 $ 18,000 Net sales (all on account)...
-
Kimbo Dima Kewa Sh. 120 per share Sh. 160 per share Sh. 140 per share Hari was to receive 10,000 shares of Sh. 10 per value in Dima Ltd. and the balance due to him on capital would be made up of the...
-
2. Consider a problem that is similar to one of the examples discussed in Week 2: a single product that needs to be processed in all three stages in a row in a sequential manner. The figure below...
-
Work in process of Alonzo Corp. on July 1 (per general ledger) is P22,800. Per cost sheets: Job 101Job 102 Direct materialsP 6,000P 8,000 Direct labor3,0002,500 Amount charged to work in process for...
-
Haley decides to sue Bart from Miracle Auto for a defective paint job on her 1 9 6 5 Ford Mustang and files her complaint in the Marin County Court. What is the source of law governs?
-
You are thinking of opening a Broadway play, I Love You, You're Mediocre, Now Get Better! It will cost $5 million to develop the show. There are 8 shows per week, and you project the show will run...
-
a coordinates employees and other resources across several functional departments to accomplish a
-
Why is the national security argument for tariffs questionable?
-
If variable manufacturing overhead is applied to production on the basis of direct labor-hours and the direct labor efficiency variance is unfavorable, will the variable overhead efficiency variance...
-
The following selected account balances for the year ended December 31 are provided for Valenko Company: Advertising expense . . . . . . . . . . . . . . . . . . $215,000 Insurance, factory equipment....
-
Why arent transactions involving accounts payable considered to be financing activities?
-
Determine Amazon.coms budgeted purchases for the next (seven-day) week. a. $220.5 million b. $315 million c. $367.5 million d. $525 million Suppose Amazon.com sells 1 million hardcover books a day at...
-
(Appendix 10A) Explain the basic difference between the straight-line and effective-interest methods of amortizing bond discount or premium. Explain when the straight-line method may be used.
-
Which of the following is the cornerstone (or most critical element) of the master budget? a. the sales budget b. the inventory budget c. the purchases and cost of goods sold budget d. the operating...
Study smarter with the SolutionInn App