Ex. 168

The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31, 2008:

Beginning Ending

Inventories:

Raw materials $17,000 $19,000

Work in process 9,000 14,000

Finished goods 11,000 8,000

Total $37,000 $41,000

In addition, the following transactions occurred in 2008:

1. Raw materials purchased on account, $95,000.

2. Incurred factory labor, $110,000, all is direct labor. (Credit Factory Wages Payable).

3. Incurred the following overhead costs during the year: Utilities $11,800, Depreciation on manufacturing machinery $10,000, Manufacturing machinery repairs $9,200, Factory insurance $9,000 (Credit Accounts Payable and Accumulated Depreciation).

4. Assigned $110,000 of factory labor to jobs.

5. Applied $44,000 of overhead to jobs.

Instructions

(a) Journalize the above transactions.

(b) Reproduce the manufacturing cost and inventory accounts. Use T-accounts.

(c) From an analysis of the accounts, compute the following:

1. Raw materials used.

2. Completed jobs transferred to finished goods.

3. Cost of goods sold.

4. Under- or overapplied overhead.