Answered step by step
Verified Expert Solution
Question
1 Approved Answer
HELP! THANK YOU! Problem Information: Morrison Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000
HELP! THANK YOU!
Problem Information: Morrison Company began the year with the following balances in its inventory accounts: Raw Materials $ 125,000 Work-in-Process $ 320,000 Finished Goods $ 400.000 Morrison applies overhead to production using direct labor cost. As of the beginning of the year, Morrison estimated total manufacturing overhead for the year to be $300,000 and total direct labor cost to be $600,000 The following transactions occurred during the year: 1. Purchased $100,000 of raw materials on account. 2. Used 07716 raw materials in production. Of the materials used, 80% were classified as direct and 20% as indirect. 3. Incurred and paid wages and salaries of $600,000. The wages were classified as: Direct labor $525,000 Indirect labor $75.000 Selling and administration $ 230,000 Incurred the following additional costs: Miscellaneous manufacturing overhead costs (this amount does not include costs of indirect materials, indirect labor and depreciation) S 85.000 Selling and Administrative costs $230,000 5. Recorded total depreciation of $120,000, related to: Factory manufacturing equipment $75,000 Equipment used for selling and administrative purposes $45,000 Work in process totaling $800,000 was transferred to Finished Goods during the year. 6. 7. During the year, finished goods costing $1,000,000 were sold for $1,500,000. 1. (1 point) 2. (1 point) 3. (3 points) Compute the predetermined overhead rate Morrison will use to apply MOH to Work-in-process. Compute the amount of overhead applied to Work-in-Process during the year. Compute the ending balances in Raw Materials, Work-in-process, and finished Goods accounts (hint: don't forget to include beginning balances). Compute the amount of over- or under-applied overhead for the year (be sure to label it as over or under applied). Assuming Morrison closes under or over-applied overhead to cost of Goods Sold, compute adjusted COGS for the period. Prepare a traditional format income statement for the year. (ignore income taxes). 4. (2 points) 5. (2 points) 6. (2 points) 7. (1 point) Clarity of supporting computationsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started