Keezel Company uses normal costing in its job-costing system. Partially completed T-accounts and additional information for Keezel for 2020 are as follows:

Requirement 1. What was the amount of direct materials issued to production during

2020?

Direct materials issued to production during 2020 was

.

Part 2

Requirement 2. What was the amount of manufacturing overhead allocated to jobs during

2020?

First identify the formula to calculate the manufacturing overhead allocated.

=

Manufacturing overhead allocated

Part 3

Manufacturing overhead allocated to jobs during 2020 was

.

Part 4

Requirement 3. What was the total cost of jobs completed during

2020?

The total cost of jobs completed during 2020 was

.

Part 5

Requirement 4. What was the balance of work-in-process inventory on December 31,

2020?

Post the entries during the year in the Work-in-process control account to determine the ending balance on December 31,

2020.

Be sure to select reference labels for each of the entries.

Work-in-Process Control

Part 6

Requirement 5. What was the cost of goods sold before proration of under- or overallocated overhead?

The cost of goods sold before proration of under- or overallocated overhead was

.

Part 7

Requirement 6. What was the under- or overallocated manufacturing overhead in

2020?

The under- or overallocated manufacturing overhead in 2020 was

.

Part 8

Requirement 7a. Dispose of the under- or overallocated manufacturing overhead using the write-off to Cost of Goods Sold.

The Cost of goods sold account balance after the write-off is

.

Part 9

Requirement 7b. Adjust for the under- or overallocated manufacturing overhead using proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold.

Enter the account balances before proration, then the adjustment amounts and finally, calculate the account balances after proration.

	Account Balance
Account	(Before Proration)
Work-in-Process
Finished Goods
Cost of Goods Sold
Total

	Proration of
	Over- or Underallocated
	Manufacturing Overhead
+
+
+

	Account Balance
	(After Proration)
=
=
=

Part 10

Requirement 8. Using each of the approaches in requirement 7, calculate

Keezel's

operating income for

2020.

First calculate operating income or loss using the write-off to cost of goods sold approach and then using the proration approach. (Use parentheses or a minus sign for an operating loss.)

	Write-off to
	Cost of Goods Sold
Revenues
Cost of Goods Sold
Gross Margin
Marketing and distribution costs
Operating income/(loss)

Proration based

on ending balances

Part 11

Requirement 9. Which approach in requirement 7 do you recommend

Keezel

use? Explain your answer briefly.

The recommended approach is the

proration approach

write-off to cost of goods sold approach

.

This is preferred because of its

accuracy and the effect it has on operating income

simplicity and the effect it has on operating income

.