PA2-5 (Algo) Recording Manufacturing Costs and Analyzing Manufacturing Overhead [LO 2-3, 2-4, 2-5] Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2018 follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $16,600 5,480 21, see The following transactions occurred during January: (a) Purchased materials on account for $27,800. (0) Issued materials to production totaling $20,200, 90 percent of which was traced to specific jobs and the remainder of which was treated as Indirect materials. (c) Payroll costs totaling $17,800 were recorded as follows: $11,700 for assembly workers 1,600 for factory supervision 2,500 for administrative personnel 2,000 for sales commissions (d) Recorded depreciation: $5.400 for factory machines, $600 for the copler used in the administrative office. (e) Recorded $1,900 of expired Insurance. Forty percent was Insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Paid $5.500 in other factory costs In cash. (9) Applied manufacturing overhead at a rate of 200 percent of direct labor cost. (n) Completed all jobs but one; the job cost sheet for the uncompleted job shows $2,500 for direct materials, $2,100 for direct labor, and $4,200 for applied overhead. (1) Sold jobs costing $51.500. The revenue earned on these jobs was $66,950. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory d. Cost of Goods Sold. e. Manufacturing Overhead. 1. Selling, General, and Administrative Expenses. g. Sales Revenue. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work In Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. e. Manufacturing Overhead f. Selling, General, and Administrative Expenses. g. Sales Revenue. 2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. 3. Determine the amount of over- or underapplied overhead. 4. Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold. Required 1 Required 2 Required 3 Required 4 Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: (Post all amounts separately. Do not combine/add any dollar amounts when posting to the T-accounts.) a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. e. Manufacturing Overhead. f. Selling, General, and Administrative Expenses. g. Sales Revenue. Show less Raw Materiale Inventory 16,800 Work In Proceea inventory 5.400 Beg. Bal. Beg Bal End. Bal. 16,600 End. Bal 5.400 Cost of Goods Sold Finished Goode Inventory 21,800 Beg. Bal Beg. Bal End. Bl 21,800 End Bal. Manufacturing Overhead Selling. General, and Administrative Expenses Beg. Bal Beg Bal End. Bal End. Bal Sales Revenue Beg Bal End. Bal Regu Required 2 >
