Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

XYZ Manufacturing Inc. has the following data for the fiscal year ending December 31, 2023: Initial Balances and Transactions: Beginning balances: Cash $30,000, Raw Materials

XYZ Manufacturing Inc. has the following data for the fiscal year ending December 31, 2023:

  1. Initial Balances and Transactions:
    • Beginning balances: Cash $30,000, Raw Materials Inventory $50,000, Work in Process Inventory $20,000, Finished Goods Inventory $40,000, Accounts Payable $25,000, Retained Earnings $115,000.
    • Purchased raw materials for $75,000 on account.
    • Issued $60,000 of raw materials to production (80% direct materials, 20% indirect materials).
    • Incurred direct labor costs of $50,000 and indirect labor costs of $15,000.
  1. Overhead and Production:
    • Applied manufacturing overhead at a rate of 150% of direct labor cost.
    • Completed goods costing $120,000 and transferred them to finished goods inventory.
    • Sold goods costing $100,000 for $150,000 on account.
  1. Adjustments:
    • Actual manufacturing overhead incurred was $80,000.
    • Depreciation on factory equipment was $10,000.
    • Accrued utilities expense for the factory of $3,000.

Tasks:

  1. Journal Entries:
    • Prepare journal entries for all transactions and adjustments listed above.
  1. Cost of Goods Manufactured:
    • Prepare a schedule of Cost of Goods Manufactured.
  1. Financial Statements:
    • Prepare an income statement for the year ending December 31, 2023.
  1. Variance Analysis:
    • Calculate the overhead variance and explain its significance.
  1. Discussion:
    • Discuss the impact of under-applied or over-applied overhead on the financial statements.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Kurt Heisinger, Joe Ben Hoyle

2nd edition

1453375723, 1453375724, 978-1453375716

More Books

Students also viewed these Accounting questions

Question

What ate the two major trends influencing office layout?

Answered: 1 week ago

Question

Using Gauss-Jordan elimination, invert this matrix ONLY 0 0 0 0 1

Answered: 1 week ago