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Carpenter Cornices, Ltd., produces a wide variety of cornice moldings for windows at a plant located in Evergreen Park, llinois. Because there are hundreds of
Carpenter Cornices, Ltd., produces a wide variety of cornice moldings for windows at a plant located in Evergreen Park, llinois. Because there are hundreds of products, some of which are made only to order, the company uses a job-order costing system. On July 1, the start of the company's fiscal year, inventory account balances were as follows: Raw materials Work in process Finished goods 11,400 $ 5,400 $ 9,100 The company applies overhead cost to jobs on the basis of machine-hours. Its predetermined overhead rate for the fiscal year starting July 1 was based on a cost formula that estimated $121,500 of manufacturing overhead for an estimated activity level of 45,000 machine-hours. During the year, the following transactions were completed (Assume all purchases and services were acquired on account): a. Raw materials purchased on account, $176,000. b. Raw materials requisitioned for use in production, $151,000 (materials costing $133,000 were chargeable directly to jobs; the remaining materials were indirect) c. Costs for employee services were incurred as follows: Direct labor Indirect labor Sales commissions Administrative salaries $ 98,000 $41,800 $ 28,000 $47,000 d. Prepaid insurance expired during the year, $21,500 ($15,100 of this amount related to factory operations, and the remainder related to selling and administrative activities) e. Utility costs incurred in the factory, $19,000 f. Advertising costs incurred, $12,200 g. Depreciation recorded on equipment, $26,000. ($19,000 of this amount was on equipment used in factory operations; the remaining $7,000 was on equipment used in selling and administrative activities.) h. Manufacturing overhead cost was applied to jobs, $?. (The company recorded 32,000 machine-hours of operating time during the year.) Goods that had cost $300,000 to manufacture according to their job cost sheets were completed. j. Sales (all on account) to customers during the year totaled $549,000. These goods had cost $299,000 to manufacture according to their job cost sheets. 1. Prepare journal entries to record the transactions for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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