Refer to information in Exercises 19-6 and 19-7. Set up T-accounts for each of the following accounts, each of which started the month with a zero balance: Raw Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Factory Overhead, Cost of Goods Sold. Then post entries for transactions a through g to the T-accounts and determine the balance of each account.
Data From Exercise 19.6
Information on Kwon Mfg.’s activities for its first month of operations follows.
a. Purchased $100,000 of raw materials on credit.
b. Materials requisitions show the following materials used for the month.
Job 201 ……………………………………………. $48,200
Job 202 ……………………………………………. 23,600
Total direct materials ……………………… 71,800
Indirect materials …………………………… 8,620
Total materials used………………………… $80,420
c. Time tickets show the following labor used for the month.
Job 201 ……………………………………………. $39,200
Job 202 ……………………………………………. 12,600
Total direct labor …………………………….. 51,800
Indirect labor 2………………………………… 4,200
Total labor used ……………………………… $76,000
d. Applied overhead to Job 201 and to Job 202 using a predetermined overhead rate of 80% of direct materials cost.
e. Transferred Job 201 to Finished Goods Inventory.
f. Sold Job 201 for $163,760 on credit.
g. Incurred the following actual other overhead costs for the month.
Depreciation of factory equipment …….. $32,000
Rent on factory building (payable) …….. 500
Factory utilities (payable) …………………… 800
Expired factory insurance …………………… 3,000
Total other factory overhead cost…….. s $36,300
1. Prepare a job cost sheet for Job 201 and for Job 202 for the month. Use the following simplified form.
2. Compute gross profit on the sale of Job 201.
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