MAKE A COST OF GOODS MANUFACTURED AND SOLD STATEMENT BASED ON THE PROBLEM 1.

Problem 1. JOB ORDER COSTING IN A MANUFACTURING COMPANY.

Palmera Company is a manufacturing firm that uses job-oder costing. On January 1, the beginning of its fiscal year, the company's inventory balances were us follows:

Raw materials inventory 200,000

Work in process inventory 150,000

Finished goods inventory 300,000

The company applies overhead cost to jobs on the basis of machine-hours worked.

For the current year, the company estimated that it would work 750,000 machine-hours and incur 4,500,000 in factory overhead cost.

a. Raw materials purchased on account, 4,100,000.

b. Raw materials inventory requisitioned and issued for use in production, 3,800,000 (3,600,000 direct materials and 200,000 indirect materials).

c. Costs were incurred for employee service; direct labor, 750,000: indirect labor 1,100,000 sales commissions, 900,000 and administrative salaries 2,000,000.

d. Sales travel costs 170,000

e. Utility costs in the factory, 430,000

f. Advertising costs 1,800,000

g. Depreciation for the year, 3,500,000 (80% relates to factory operations, and 20% relates to selling and administrative activities)

h. Insurance expired during the year, 100,000 (70% relates to factory operations, and the remaining 30% relates to selling and administrative activities.)

i. Factory overhead applied to production. Due to greater than expected demand for its products, the company worked 800,000 machines-hours during the year.

j. Goods costing 9,000,000 to manufacturing according to their job sheets completed during the year.

k. Goods sold on account to customers during the year at a total selling price of 15,000,000. The goods cost 8,700,000 to manufacture according to their job cost sheets.