Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct laborhours. Its predetermined overhead rate was based on a cost formula that estimated $350,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $250,000. b. Raw materials used in production (all direct materials), $235,000. c. Utility bilis incurred on account, $69,000 ( 90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: e. Maintenance costs incurred on account in the factory, $64,000 f. Advertising costs incurred on account, $146,000. 9. Depreciation was recorded for the year, $82,000(75% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $107,000(80% related to factory facilities, and the remainder related to selling and administrative facilities). 1. Manufacturing overhead cost was applied to jobs, $? 1. Cost of goods manufactured for the year, $870,000. k. Sales for the year (all on account) totaled $1,700,000. These goods cost $900,000 according to their job cost sheets. The baiances in the inventory accounts at the beginning of the year were: Required: 1. Prepare journal entries to record the preceding transactions. 2. Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) 3. Prepare a schedule of cost of goods manufactured. Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct laborhours. Its predetermined overhead rate was based on a cost formula that estimated $350,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $250,000. b. Raw materials used in production (all direct materials), $235,000. c. Utility bilis incurred on account, $69,000 ( 90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: e. Maintenance costs incurred on account in the factory, $64,000 f. Advertising costs incurred on account, $146,000. 9. Depreciation was recorded for the year, $82,000(75% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $107,000(80% related to factory facilities, and the remainder related to selling and administrative facilities). 1. Manufacturing overhead cost was applied to jobs, $? 1. Cost of goods manufactured for the year, $870,000. k. Sales for the year (all on account) totaled $1,700,000. These goods cost $900,000 according to their job cost sheets. The baiances in the inventory accounts at the beginning of the year were: Required: 1. Prepare journal entries to record the preceding transactions. 2. Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) 3. Prepare a schedule of cost of goods manufactured
