Question
A carpenter company uses job-order costing. The following is a summary of factory operations: Direct materials purchased on account $125,000 Direct materials requisitioned $110,000 Direct
A carpenter company uses job-order costing. The following is a summary of factory operations:
Direct materials purchased on account | $125,000 |
Direct materials requisitioned | $110,000 |
Direct labor costs incurred | $256,000 |
Factory Overhead costs incurred (Depreciation Expense only) | $150,000 |
Cost of goods completed | $515,000 |
Cost of goods sold | $378,000 |
Sales on Account | $430,000 |
Factory overhead applied | ? |
Factory overhead costs are applied at 50% of direct labor costs.
Required:
1. Prepare the required journal entries for the above transactions
2. Prepare the journal entry to dispose of the overhead variance using the immediate write-off method.
3. Is the factory overhead overapplied or underapplied?
4. What is the actual, correct amount of cost of goods sold?
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