Question
Brooks Corporation uses a job-order costing system to apply manufacturing costs to jobs. Overhead is applied to production at a rate of $0.75 per direct
Brooks Corporation uses a job-order costing system to apply manufacturing costs to jobs. Overhead is applied to production at a rate of $0.75 per direct labor cost dollar. The company closes its underapplied or overapplied overhead to work in progress, finished foods inventory and cost of goods sold on a prorate basis.. Its balance sheet on March 1 is as follows:
Brooks Corporation | |||||
Balance Sheet | |||||
March 1 | |||||
Assets |
|
|
|
|
|
Cash |
|
|
| $ | 86,000 |
Raw materials | $ | 23,800 |
|
|
|
Work in process |
| 22,500 |
|
|
|
Finished goods |
| 30,500 |
|
| 76,800 |
Prepaid expenses |
|
|
|
| 1,920 |
Property, plant, and equipment (net) |
|
|
|
| 190,000 |
Total assets |
|
|
| $ | 354,720 |
Liabilities and Stockholders Equity |
|
|
|
|
|
Accounts payable |
|
|
| $ | 19,600 |
Retained earnings |
|
|
|
| 335,120 |
Total liabilities and stockholders equity |
|
|
| $ | 354,720 |
During March the company completed the following transactions:
Cash sales to customers, $570,000.
Required: 1. Prepare Brooks Corporations schedule of cost of goods manufactured for the month ended March 31st. 2. Prepare Brooks Corporations schedule of cost of goods sold for the month ended March 31st after adjusting for overallocated or under-allocated overhead. 3. Prepare Brooks Corporations income statement for the month ended March 31st 4. Show the final adjusted balances in work in progress and finished goods inventory on March 31 March. |
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