Data P3-3:
FROYA FABRIKKER A/S
Beginning estimates:		The company uses a job-order costing
Manufacturing overhead cost	$360,000	system and applies overhead cost to
Direct labor hours	900	jobs on the basis of direct labor-hours.
Transactions:
Raw materials purchased	$200,000
Raw materials requisitioned	$185,000
Utility bills	$70,000
For factory operations	90%
For sales and administrative activities	10%
Costs for salaries and wages:
Direct labor (975 hours)	$230,000
Indirect labor	$90,000
Selling and admin salaries	$110,000
Maintenance costs	$54,000
Advertising costs	$136,000
Depreciation	$95,000
For factory equipment	80%
For sales and administrative equipment	20%
Rental costs	$120,000
Space for factory operations	85%
Space for sales & administration	15%
Manufacturing overhead cost applied
to jobs	?
Cost of goods manufactured	$770,000
Sales on account	$1,200,000
Cost of goods sold	$800,000	According to job cost sheets.
Inventory balances:
Raw materials	$30,000
Work in process	$21,000
Finished goods	$60,000
Job 412:
Direct Materials	$8,000
Direct labor hours	39
Total direct labor cost	$9,200
Units	4
% billed above cost	60%
Required:
1. Prepare journal entries to record the preceding data (transactions).
2. Post your entries to T-accounts. Determine the ending balances in the
inventory accounts and in the Manufacturing Overhead account.
3. Prepare a schedule of cost of goods manufactured.
4. Prepare a journal entry to close any balance in the Manufacturing Overhead
account to cost of goods sold.
5. Prepare an income statement for the year.
6. Job 412 was one of the many jobs started and completed during the year.
The job required $8,000 indirect materials and 39 hours of direct labor time at
a total cost of $9,200. The job contained only four units. If the company bills at
a price 60% above the unit product cost on the job cost sheet, what price per unit
would have been charged to the customer?