Inventory Costing; Overhead Analysis; Statement of Cost of Goods Sold. The Cost Department of Columbus Company received
Question:
Inventory Costing; Overhead Analysis; Statement of Cost of Goods Sold. The Cost Department of Columbus Company received the following monthly data, pertaining solely to manufacturing activities, from the general ledger clerk: LO6 Work in process inventory, January1. $ 32,500 Materials inventory, January1. 21,000 Directlabor. 256,000 Materialspurchased. 108,000 Materials returned tosuppliers. 5,050 Supervision. 17,500 Indirectlabor. 29,050 Heat, light, andpower. 23,800 Depreciation—factorybuildings. 7,500 Property tax—factoryfacilities. 4,000 Insurance on factorybuildings. 3,000 Transportation in (factoryoverhead). 6,500 Repairs and maintenance—factoryequipment. 8,250 Depreciation—factoryequipment. 7,500 Miscellaneous factoryoverhead. 9,900 Finished goods inventory, January1. 18,000 Applied factoryoverhead. 115,200 Additional data:
(a) Physical inventory taken January 31 shows $9,000 of materials on hand.
(b) The January 31 work in process and finished goods inventories show the following direct materials and direct labor contents:
Direct Materials Direct Labor Work in process. $ 9,000 $16,000 (2,000 hrs.)
Finishedgoods. 10,000 40,000 (5,000 hrs.)
(c)Factory overhead is applied to these two ending inventories on the basis of a predetermined factory over¬ head rate of $3.60 per direct labor hour.
Required:
(1) Determine the cost assigned to the ending work in process and finished goods inventories, including fac¬ tory overhead.
(2) Prepare a schedule of the total actual factory overhead for the month.
(3) Calculate the over- or underapplied factory overhead.
(4) Prepare a detailed cost of goods sold statement, assuming that over- or underapplied overhead is closed to the cost of goods sold account.
Step by Step Answer:
Cost Accounting
ISBN: 9780538828079
11th Edition
Authors: Lawrence H. Hammer, William K. Carter, Milton F. Usry