Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Campbell Corporation makes rocking chairs. The chairs move through two departments during production. Lumber is cut into chair parts in the cutting department, which transfers

image text in transcribed
Campbell Corporation makes rocking chairs. The chairs move through two departments during production. Lumber is cut into chair parts in the cutting department, which transfers the parts to the assembly department for completion. The company sells the unfinished chairs to hobby shops. The following transactions apply to Campbell's operations for its first year, Year 1.(Assume that all transactions are for cash unless otherwise stated.)
The company was started when it acquired a $110,000 cash contribution from the owners.
The company purchased $36,000 of direct raw materials and $1,100 of indirect materials. Indirect materials are capitalized in the Production Supplies account.
Direct materials totaling $11,000 were issued to the cutting department.
Labor cost was $53,200. Direct labor for the cutting and assembly departments was $18,000 and $26,000, respectively. Indirect labor costs were $9,200.
The predetermined overhead rate was $0.50 per direct labor dollar in each department.
Actual overhead costs other than indirect materials and indirect labor were $12,900 for the year.
The cutting department transferred $22,000 of inventory to the assembly department.
The assembly department transferred $40,000 of inventory to finished goods.
The company sold inventory costing $35,000 for $63,000.
Selling and administrative expenses were $6,000.
A physical count revealed $300 of production supplies on hand at the end of Year 1.
Assume that over- or underapplied overhead is insignificant.
Required:
a. Record the data in T-accounts.
b. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant.
c. Close the revenue and expense accounts.
d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.
image text in transcribed

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

Step: 3

blur-text-image

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 Part 2

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

6th Canadian edition Volume 1

1118306791, 978-1118306796

More Books

Students also viewed these Accounting questions