Please explain how do we obtain all the values, i am just not understanding. Please explain in detail and clean. Thank you in advance.
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: $15,900 Raw Materials Inventory Work in Process Inventory Finished Goods Inventory 5,800 20,000 The following transactions occurred during January (a) Purchased materials on account for $26,800. (b) Issued materials to production totaling $20,800, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $19,200 were recorded as follows: $11,400 for assembly workers 1,700 for factory supervision 2,600 for administrative personnel 3,500 for sales commissions (d) Recorded depreciation: $4,100 for factory machines, $800 for the copier used in the administrative office. (e) Recorded $1,300 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Paid $4,900 in other factory costs in cash. (g) 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 $2,100 for direct materials, $2,300 for direct labor, and $4,600 for applied overhead. (1) Sold jobs costing $51,200. The revenue earned on these jobs was $66,560. 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 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. Raw Materials Inventory 15,900 Work in Process Inventory 5,800 Beg. Bal Beg. Bal End. Bal. End. Bal Cost of Goods Sold Finished Goods Inventory 20,000 Beg. Bal. Beg. Bal. End. Bal End. Bal. Manufacturing Overhead Selling, General, and Administrative Expenses Beg. Bal. Beg Bal End. Bal End. Bal Sales Revenue Beg Bal End. Bal. Required 1 Required 2 Required 3 Required 4 Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. Unadjusted Gross Profit Required 1 Required 2 Required 3 Required 4 Determine the amount of over- or underapplied overhead. Manufacturing Overhead Required 1 Required 2 Required 3 Required 4 Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold. Adjusted Gross Profit
