Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ABC Company uses a job order costing system and had three jobs in process at the beginning of the month. The beginning balance in the

ABC Company uses a job order costing system and had three jobs in process at the beginning of the month. The beginning balance in the WIP account was $145,400, made up of $42,400, $65,100, and $37,900 as shown on the cost sheets for Jobs 921, 922, and 923 respectively. During the month, ABC added the following materials and labor costs to each job.

Inventory Materials used for Month Labor Dollars used for Month
Job 921 12,200 30,000
Job 922 13,400 17,000
Job 923 17,000 9,500
Total 42,600 56,500

ABC estimated overhead costs for the period at $38,025 and allocates overhead based on direct labor dollars. ABC estimated total direct labor dollars to be $58,500. Actual overhead costs for the month were $37,800.

ABC completed job 922 and sold it for $127,250 in cash during the month.

a. What is the predetermined overhead rate?

b. What is the balance in the WIP account at the end of the month?

c. Is overhead over or under applied? By how much?

d. Explain how the entry to close the Manufacturing Overhead account would affect the Cost of Goods Sold?

e. What is the amount of gross margin ABC would report on its income statement for the month?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Valerie A. Kinnear, Donald E. Kieso, Paul D. Kimmel, Barbara A. Trenholm, Joan E. Barlow

6th Canadian Edition

1118557301, 978-1118557303

More Books

Students also viewed these Accounting questions

Question

1. Share your own hobbies, interests, and favorites.

Answered: 1 week ago