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Hi! Could you please answer these questions? I need them asap. Thank you! sells its birdcages through an extensive network of street vendors who receive
Hi! Could you please answer these questions? I need them asap. Thank you!
sells its birdcages through an extensive network of street vendors who receive commissions on their sales. The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $115,000 of manufacturing overhead for an estimated activity level of $50,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: Raw materials Nork in process Finished goods $10,500 $ 4,10o During the year, the following transactions were completed: a. Raw materials purchased for cash, $ 161,000. were indirect). c. Cash paid to employees as follows: Direct labor Indirect labor Sales comainsions dministrative salaries 158,000 $ 292,000 $ 20,000 $ 48,000 selling and administrative activities) e. Cash paid for utility costs in the factory, $11,000. f. Cash paid for advertising, $14,000. g. Depreciation recorded on equipment, $21,000. ($16,000 of this amount related to equipment used in factory operations; the remaining $5,000 related to equipment used in selling and administrative activities.) h, Manufacturing overhead cost was applied to jobs, $L i. Goods that had cost $227,000 to manufacture according to their job cost sheets were completed. j. Sales for the year (all paid in cash) totaled $512,000. The total cost to manufacture these goods according to their job cost sheets was $218,000. Required: 1. Prepare journal entries to record the transactions for the year 2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts). 3A. Is Manufacturing Overhead underapplied or overapplied for the year? 3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. for the income statement is available in the journal entries and T-accounts you have prepared)Step by Step Solution
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