AB Enterprises makes custom dies for manufacturing.AB opened for business on January 1, 2020.During the month the
Question:
AB Enterprises makes custom dies for manufacturing.AB opened for business on January 1, 2020.During the month the following events occurred.
1.Materials requisitioned from the "Raw Materials" inventory:$50,000 of direct materials and $10,000 of indirect materials.The direct materials were used in the following amounts for the following jobs:
Job #001 -$25,000
Job#002 -20,000
Job#003 -5,000
2.Accrued payroll of $110,000.Of that amount, $30,000 was for indirect labor.Work tickets show the following amounts of direct labor were used on jobs:
Job #001 -$40,000
Job#002 -30,000
Job#003 -10,000
3.Incurred overhead costs of $40,000, broken down as follows:
$10,000 accrual of property taxes,
$10,000 for rent prepaid rent,
$20,000 of depreciation on factory equipment, and
4.Paid $5,000 in cash for advertising campaign in "Manufacturing Today" magazine.
5.Overhead is assigned to jobs at a rate of 105% of direct labor cost.
6.Completed Job #1 and Job#2.Completed jobs are transferred to finished goods.
7.Sold job #1 on account for $200,000.
Q1.Calculate the total costs associated with Job #1?
Q2.What is the ending balance in "Work in Process" on January 31?
Q3.Calculate the over- or underapplied overhead amount for January 2020 for AB Enterprises.
Q4.What is the net income for AB Enterprise for January, 2020?