Business Transactions

Aria spent the month of December talking to various suppliers in order to determine her cost structure. She added cost data to the information in Table $1.$

A&J Bakery Inc. opened for business on January $1,2020$ as planned. During the month of January, the business purchased and used $200$ pounds of flour, $200$ pounds of sugar, $67$ dozen eggs and had $4$ bad eggs to dispose of during the month$2,20$ baking soda boxes, $200$ pounds of butter, $100$ pounds of raisons, $50$ bottles of rum, and the other ingredients $($one box of each for a total of four$)$ all from one supplier on account. Manufacturing overhead is applied to production at $4$ dollars per cake. Aria purchased the oven using the start up capital and paid all salaries. Her nieces worked $300$ hours in total for the month. January was a very good month for the bakery since it baked $200$ cakes and sold all for cash. The average selling price was $$50$ per cake. All manufacturing overhead is closed out at month end. The supplier was paid at month end.

Required: Document A&J Bakery Inc January transactions using T$-$accounts $($round all calculations to $2$ decimal places$)$ All other costs such as utilities, must be accounted for in the Taccounts $($assume such transactions where applicable, are paid in cash$)-30$ points

TABLE $1$: COST INFORMATION

$\backslash$table$[[$Item and Ingredients,Cost,Standard per Cake$],[$Conventional oven,$$6,000($depreciated over $5,$n$/$a$],[,\backslash$table$[[$years on a SL basis No$],[$salvage value$)]],],[$Refrigerator$,$$$0($provided by the landlord$),],[$Baking pans, licenses,$$0($paid for by dad$),$n$/$a$],[$Baking flour,$$24$ per $8$ pounds bag,$1$ pound$],[$Eggs$,$$$2$ per dozen,$4$ eggs$],[$Sugar$,$$$15$ per $25$ pounds bag,$1$ pound$],[$Baking soda,$$6$ per $14$ pounds box,$],[$Butter$,$$$6\mathrm{.}50$ per $4$ pounds,$1$ pound$],[$Raisins$,$$$8$ per $2$ pounds,$\frac{1}{2}$ pound$],[$Others $($currants$,$ diced date,,$-2,],[$nutmeg$,$ molasses$),$$$30$ for all $4$ boxes per month,$],[$Cash Register,$$12$ per month $($rental for $2,],[$Rum $($alcohol$),$$$12$ per bottle,$\frac{1}{4}$ gtr of bottle$],[$Utilities $($includes gas, electric,$$50$ per month,$],[$and water$),$$$50$ per month,$],[$Mobile phone $($business$){?}^3,$$$500$ per month,$1$ person $1\mathrm{.}5$ hours per$],[$Salary$-$ Aria,$$8$ per hour,$],[$Salary $-$ nieces,$$100$ per month,$],[$Salary$-$aunt,$$100$ per month,$],[$Accountant$,$$$4\mathrm{.}00$ per cake,$],[$Estimated MOH,,$]]$

${?}^2$ Prices are excluded from project since due to materiality and to simplify the exercise.

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