Question
The following information was taken from the accounting records of the Superior Company: Depreciation of equipment........................................................................................... $ 70,000 Direct labor........................................................................................... 120,000 Factory taxes........................................................................................... 2,000 Goods
The following information was taken from the accounting records of the Superior Company:
Depreciation of equipment........................................................................................... | $ 70,000 |
Direct labor........................................................................................... | 120,000 |
Factory taxes........................................................................................... | 2,000 |
Goods in process inventory, Dec. 31, 2019........................................................................................... | 250,000 |
Indirect labor........................................................................................... | 10,000 |
Power........................................................................................... | 16,000 |
Raw materials inventory, Dec. 31, 2019........................................................................................... | 60,000 |
Raw materials purchases, for year........................................................................................... | 230,000 |
Goods in process inventory, January 1, 2019........................................................................................... | 302,000 |
Raw materials inventory, January 1, 2019........................................................................................... | 110,000 |
Required:
Prepare a manufacturing statement for the Superior Company for 2019.
The following information was taken from the accounting records of the Superior Company:
Depreciation of equipment........................................................................................... | $ 70,000 |
Direct labor........................................................................................... | 120,000 |
Factory taxes........................................................................................... | 2,000 |
Goods in process inventory, Dec. 31, 2019........................................................................................... | 250,000 |
Indirect labor........................................................................................... | 10,000 |
Power........................................................................................... | 16,000 |
Raw materials inventory, Dec. 31, 2019........................................................................................... | 60,000 |
Raw materials purchases, for year........................................................................................... | 230,000 |
Goods in process inventory, January 1, 2019........................................................................................... | 302,000 |
Raw materials inventory, January 1, 2019........................................................................................... | 110,000 |
Required:
1. Prepare a manufacturing statement for the Superior Company for 2019.
2. Explain the conceptual difference between total manufacturing costs and cost of goods manufactured. What does it mean?
3.The factory overhead account must be adjusted at the end of an accounting period. Explain why this adjustment is needed and the consequences to the financial statements if the adjustment is not made.
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