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Question 3 Better Than That, Co. provides the following information: October 31 inventory of raw materials is $35,000. Raw materials purchases in November are $240,000.
Question 3 Better Than That, Co. provides the following information:
- October 31 inventory of raw materials is $35,000.
- Raw materials purchases in November are $240,000.
- Total factory payroll cost (includes both direct and indirect labor) in November is $105,850.
- Actual factory overhead costs incurred in November are as follows: indirect materials, $15,900; indirect labor, $9,000; factory rent, $25,000; factory utilities, $23,880; and factory equipment depreciation, $42,000.
- The predetermined overhead rate is 120% of direct labor cost.
- Job L5 is sold to a customer in November for $255,000 on account.
- Costs related to the three jobs worked on in November follow.
Job J1 | Job L5 | Job T2 | ||||||||||
Balances on October 31 | : | |||||||||||
Direct materials | $ | 0 | $ | 0 | $ 19,500 | |||||||
Direct labor | 0 | 0 | $6,850 | |||||||||
Applied overhead | 0 | 0 | $8,220 | |||||||||
Costs during November: | ||||||||||||
Direct materials | 56,400 | 101,800 | $ | 72,100 | ||||||||
Direct labor | 22,550 | 45,600 | 28,700 | |||||||||
Applied overhead | ? | ? | ? | |||||||||
Status on November 30 | In process | Finished (sold) | Finished (unsold) | |||||||||
- Determine:
- The WIP inventory account balance as of October 31st.
- Total direct materials cost for November
- Total direct labor cost for November
- Total Applied factory OH cost for November
- The total costs assigned to each job as of November 30th (including any balances from October 31).
- Prepare journal entries for the month of November to record the below transactions (make sure to use proper journal entry formatting and include a brief description of each entry).
- Raw materials purchases (on credit).
- Direct materials used in production.
- Direct labor paid in cash and assigned to Work in Process Inventory.
- Overhead costs applied to Work in Process Inventory.
- Indirect materials used and assigned to Factory Overhead.
- Indirect labor paid in cash and assigned to Factory Overhead.
- Actual other overhead costs incurred (assume Factory rent and utilities are paid in cash).
- Transfer of Jobs L5 and T2 to Finished Goods Inventory.
- Revenue from the sale of Job L5.
- Cost of goods sold for Job L5.
- Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account (Assume the amount is not material).
- Determine the November 30th balances of the firms three inventory accounts:
- raw materials inventory account
- WIP inventory account
- finished goods inventory account (assume finished goods inventory balance as of October 31st was $0).
- Prepare a schedule of cost of goods manufactured for November.
- Calculate the firms gross profit for November.
***you're suppose to calculate applied overhead. The information above is all you get.
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