Question
The Fine manufacturing company uses job order costing system. The company uses machine hours to apply overhead cost to jobs. At the beginning of 2015,
The Fine manufacturing company uses job order costing system. The company uses machine hours to apply overhead cost to jobs. At the beginning of 2015, the company estimated that 200,000 machine hours would be worked and $800,000 overhead cost would be incurred during 2015. The balances of raw materials, work in process (WIP), and finished goods at the beginning of 2015 were as follows: Raw materials $ 30,000 Work in process 20,000 Finished goods 70,000 The Fine manufacturing company recorded the following transactions during 2015:
a Raw materials purchased on account, $900,000.
b Raw materials were requisitioned for use in production, $775,000 ($700,000 direct materials and $75,000 indirect materials).
c Direct labor labor, $150,000; indirect labor, $220,000; sales commission, $180,000; and administrative salaries, $400,000.
d Sales travel costs were $34,000.
e Utility costs incurred in the factory, $86,000.
f Advertising expenses were $360,000.
g Depreciation for the year was $700,000 ($560,000 relates to factory and $140,000 relates to selling and administrative activities).
h Insurance expired during the year, $20,000 ($14,000 relates to factory operations and $6,000 relates to selling and administrative activities).
i Fine manufacturing company worked 160,000 machine hours. Manufacturing overhead was applied to production.
j Goods costing $1,800,000 were completed during the year.
k The goods costing $1,740,000 were sold to customers for $3,000,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started