You are asked to bring the following incomplete accounts of a printing plant acquired in a merger up to date through January 31, 2011. Also consider the data that appear following the T-accounts.

Additional information:

1. The overhead is applied using a budgeted rate that is set every December by forecasting the following year’s overhead and relating it to forecast direct labour costs. The budget for 2011 called for $640,000 of direct labour and $800,000 of factory overhead.

2. The only job unfinished on January 31, 2011, was No. 419, on which total labour charges were $3,000 (200 direct-labour-hours). Total direct materials charges were $21,000.

3. Total materials placed into production during January totalled $140,000.

4. Cost of goods completed during January was $260,000.

5. January 31 balances of direct materials totalled $27,000.

6. Finished-goods inventory as of January 31 was $35,000.

7. All factory workers earn the same rate of pay. Direct-labour-hours for January totalled 3,000. Indirect labour and supervision totalled $12,000.

8. The gross factory payroll paid on January paydays totalled $55,000. Ignore with holdings.

9. All “actual ?factory overhead incurred during January has already been posted.

Compute:

1. Direct materials purchased during January.

2. Cost of goods sold during January.

3. Direct labour costs incurred during January.

4. Overhead applied during January.

5. Balance, Accrued Factory Payroll, December 31, 2010.

6. Balance, Work-in-Process, December 31, 2010.

7. Balance, Work-in-Process, January 31, 2011.

8. Over applied or under applied overhead as of January.

Transcribed Image Text:

Direct Materials Inventory Accrued Factory Payroll 12/31/10 1/31/11 Balance Balance 5,000 20,000 Factory Department Work in Process Overhead Control Total January charges 55,000 Finished Goods Cost of Goods Sold 12/31/10 Balance 25,000