Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Job 1 was started at the beginning of the accounting period but not completes. Raw Materials were purchased on account for $160,000. Raw Materials costing

image text in transcribed
Job 1 was started at the beginning of the accounting period but not completes. Raw Materials were purchased on account for $160,000. Raw Materials costing $160,000 were issued from the storeroom for use in production. Of this total, $136,000 was for direct materials ($36,000 for Job 1, $80,000 for Job 2 and $20,000 for Job 3) and $24,000 was for indirect materials. Wages were paid (very simplified example) including direct labor of $200,000 ($40,000 for Job 1, $100,000 for Job 2 and $60,000 for Job 3), indirect labor of $85,000, and selling and administrative of $90,000.Utility costs for the factory of $40,000 were incurred. Prepaid insurance of $20,000 expired during the year, 80% was factory related and 20% was administrative. Advertising Costs of $40,000 were incurred during the year. Depreciation of $145,000 was accrued on factory assets and $15,000 on administrative assets. Manufacturing Overhead was applied to jobs using direct labor dollars as the allocation base. The estimated Overhead for the year was $315,000 and the estimated direct labor cost was $210,000.Jobs 1 and 2 were completed and transferred to the finished goods warehouse. Job 1 was sold on account for $400,000. Job 1 was started at the beginning of the accounting period but not completes. Raw Materials were purchased on account for $160,000. Raw Materials costing $160,000 were issued from the storeroom for use in production. Of this total, $136,000 was for direct materials ($36,000 for Job 1, $80,000 for Job 2 and $20,000 for Job 3) and $24,000 was for indirect materials. Wages were paid (very simplified example) including direct labor of $200,000 ($40,000 for Job 1, $100,000 for Job 2 and $60,000 for Job 3), indirect labor of $85,000, and selling and administrative of $90,000.Utility costs for the factory of $40,000 were incurred. Prepaid insurance of $20,000 expired during the year, 80% was factory related and 20% was administrative. Advertising Costs of $40,000 were incurred during the year. Depreciation of $145,000 was accrued on factory assets and $15,000 on administrative assets. Manufacturing Overhead was applied to jobs using direct labor dollars as the allocation base. The estimated Overhead for the year was $315,000 and the estimated direct labor cost was $210,000.Jobs 1 and 2 were completed and transferred to the finished goods warehouse. Job 1 was sold on account for $400,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Debunked An Auditor Reviews The 2020 Election And The Lessons Learned

Authors: Joseph Fried

1st Edition

1645720756, 978-1645720751

More Books

Students also viewed these Accounting questions