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The company issued 100,000 shares of common stock for $1.00 per share. The company purchased $20,000 of raw materials on account. Raw materials: allocated $4,000
The company issued 100,000 shares of common stock for $1.00 per share. | ||||
The company purchased $20,000 of raw materials on account. | ||||
Raw materials: allocated $4,000 to job 101, $7,000 to job 102, & $5,000 to job 103. | ||||
Enter these values on the job cost sheets. | ||||
Direct Labor for each job: Job 101: $9,000; Job 102: $6,000; Job 103: $5,000. | ||||
Enter these values on the job cost sheets. | ||||
Actual manufacturing overhead incurred and accrued as a payable was $14,000 plus $3,000 of Accumulted depreciation. (Do not record on job sheets) | ||||
Manufacturing Overhead is applied at a rate of 80% of direct labor cost. | ||||
(80% of $20,000 is $16,000). Apply at the same rate on each job cost sheet. | ||||
Jobs 101 and 102 were finished and moved to Finished Goods. | ||||
Job 101 was sold to a customer. The price is set at twice the cost of the job. | ||||
The cost of job 101 is moved to Cost of Goods Sold. | ||||
Note that the Manufacturing Overhead has an ending debit balance of $1,000. | ||||
This is because the Predetermined Overhead Rate of 80% of direct labor cost | ||||
did not accurately predict the actual amount of overhead incurred. | ||||
At the end of the year, this balance in the MO account must be closed to COGS. |
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