Question
4-41. GENERAL LEDGER RELATIONSHIPS, UNDER- AND OVERALLOCATION. (S. Sridhar, adapted) Walworth Company uses normal costing in its job-costing system. Partially completed T-accounts and additional information
4-41. GENERAL LEDGER RELATIONSHIPS, UNDER- AND OVERALLOCATION. (S. Sridhar, adapted) Walworth Company uses normal costing in its job-costing system. Partially completed T-accounts and additional information for Walworth for 2020 are as follows: The table depicts direct materials control, work-in-process control, finished goods control, manufacturing overhead control, manufacturing overhead allocated, and cost of goods sold. The details of the table are as follows: 1. Direct materials control 1-1-2020: 44,000; 233,000 140,000 2. Work-in-process control 1-1-2020: 43,000 Direct manufacturing labor: 354,000 3. Finished goods control 1-1-2020: 11,000; 667,800 923,920 4. Manufacturing overhead control 509,000 5. Manufacturing overhead allocated: Blank 6. Cost of goods sold: Blank Additional information: a. Direct manufacturing labor wage rate was $12 per hour. b. Manufacturing overhead was allocated at $16 per direct manufacturing labor-hour. c. During the year, sales revenues were $1,080,000, and marketing and distribution costs were $129,000. Required 1. What was the amount of direct materials issued to production during 2020? 2. What was the amount of manufacturing overhead allocated to jobs during 2020? 3. What was the total cost of jobs completed during 2020? 4. What was the balance of work-in-process inventory on December 31, 2020? 5. What was the cost of goods sold before proration of under- or overallocated overhead? 6. What was the under- or overallocated manufacturing overhead in 2020? 7. Adjust for the under- or overallocated manufacturing overhead using the following: a. Write-off to Cost of Goods Sold b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold 8. Using each of the approaches in requirement 7, calculate Walworths operating income for 2020. 9. Which approach in requirement 7 do you recommend Walworth use? Explain your answer briefly.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started