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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
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? |
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