Delta Manufacturing Company applies manufacturing overhead to jobs on the basis of machine hours. The 2000 estimates
Question:
Delta Manufacturing Company applies manufacturing overhead to jobs on the basis of machine hours. The 2000 estimates of manufacturing overhead and machine hours were:
Manufacturing overhead . . . . . . $\$ 1,825,000$
Machine hours . . . . . . . . . . . . 365,000 Delta had the following transactions for October 2000:
a. Raw materials of $\$ 420,000$ were purchased on account.
b. Raw materials of $\$ 400,000$ were issued to production; 90 percent were direct materials and the balance were indirect materials.
c. Direct labor costs incurred, $\$ 300,000$.
d. Indirect labor costs incurred, $\$ 55,000$.
e. Selling, general, and administrative expenses incurred, $\$ 150,000$
f. Manufacturing overhead costs incurred:
Plant depreciation (factory ..... $\$ 25,000$
Equipment depreciation (factory) ..... 14,000 Utilities (factory) ..... 7,000 Factory maintenance ..... 9,000 Factory taxes and insurance ..... 5,000 Miscellaneous manufacturing overhead ..... 6,000 g. Machine hours for the month, 30,400 .
h. Eighty-five percent of Work-in-Process Inventory was transferred to Finished Goods Inventory. Assume that beginning Work-in-Process Inventory amounted to $\$ 95,000$.
i. All finished goods are sold. (There is no beginning or ending finished goods inventory.)
j. Over- or underapplied manufacturing overhead is charged to Cost of Goods Sold, and overhead accounts are closed 1. Prepare journal entries to reflect the flow of costs incurred during October 2. Assuming that beginning raw materials inventory was $\$ 16,000$ and beginning work-in-process inventory was $\$ 95,000(\mathrm{~h})$, prepare a cost of goods manufactured schedule for October 2000
Step by Step Answer:
Survey Of Accounting
ISBN: 9780538846172
1st Edition
Authors: James D. Stice, W. Steve Albrecht, Earl Kay Stice, K. Fred Skousen