A manufacturer uses job-order costing. On January 1, the company's inventory balances were as follow Raw materials Work in process Finished goods $50,500 $25,000 $38,100 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined overhead rate was based on a cost formula that estimated $470,000 of total manufacturing overhead for an estimated activity level o 40,000 direct labor-hours. The following transactions were recorded for the year: a. Raw materials were purchased on account, $592,000. b. Raw materials used in production, $557,000. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $442,000; indirect labor, $150,000; selling and administrative salaries, $295,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $381,000 e. Incurred various additional manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $320,000. f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. g. Jobs costing $1,399,450 to manufacture according to their job cost sheets were completed during the year. h. Jobs were sold on account to customers during the year for a total of $2,914,000. The jobs cost $1,409,000 to manufacture according to their job cost sheets. The company closes any over- or under-applied manufacturing overhead to Cost of Goods Sold. What is the gross margin for the year?
A manufacturer uses job-order costing. On January 1, the company's inventory balances were as follow Raw materials Work in process Finished goods $50,500 $25,000 $38,100 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined overhead rate was based on a cost formula that estimated $470,000 of total manufacturing overhead for an estimated activity level o 40,000 direct labor-hours. The following transactions were recorded for the year: a. Raw materials were purchased on account, $592,000. b. Raw materials used in production, $557,000. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $442,000; indirect labor, $150,000; selling and administrative salaries, $295,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $381,000 e. Incurred various additional manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $320,000. f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. g. Jobs costing $1,399,450 to manufacture according to their job cost sheets were completed during the year. h. Jobs were sold on account to customers during the year for a total of $2,914,000. The jobs cost $1,409,000 to manufacture according to their job cost sheets. The company closes any over- or under-applied manufacturing overhead to Cost of Goods Sold. What is the gross margin for the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![A manufacturer uses job-order costing. On January 1, the company's inventory balances were as follow
Raw materials
Work in process
Finished goods
$50,500
$25,000
$38,100
The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined
overhead rate was based on a cost formula that estimated $470,000 of total manufacturing overhead for an estimated activity level of
40,000 direct labor-hours. The following transactions were recorded for the year:
a. Raw materials were purchased on account, $592,000.
b. Raw materials used in production, $557,000. All of of the raw materials were used as direct materials.
c. The following costs were accrued for employee services: direct labor, $442,000; indirect labor, $150,000; selling and administrative
salaries, $295,000.
d. Incurred various selling and administrative expenses (e.g, advertising, sales travel costs, and finished goods warehousing),
$381,000
e. Incurred various additional manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $320,000.
f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during
the year.
g. Jobs costing $1,399,450 to manufacture according to their job cost sheets were completed during the year.
h. Jobs were sold on account to customers during the year for a total of $2,914,000. The jobs cost $1,409,000 to manufacture
according to their job cost sheets.
The
company closes any over- or under-applied manufacturing overhead to Cost of Goods Sold. What is the gross margin for the year?
O 1,516,750
O 1,505,000
O 1,493,250
O none of the answers listed
01514 550](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Facec29ea-d950-46f5-9e27-0404e7e53248%2Fa6bb3418-a45a-47b5-9533-10ea588123d4%2Fsbz9di_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A manufacturer uses job-order costing. On January 1, the company's inventory balances were as follow
Raw materials
Work in process
Finished goods
$50,500
$25,000
$38,100
The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined
overhead rate was based on a cost formula that estimated $470,000 of total manufacturing overhead for an estimated activity level of
40,000 direct labor-hours. The following transactions were recorded for the year:
a. Raw materials were purchased on account, $592,000.
b. Raw materials used in production, $557,000. All of of the raw materials were used as direct materials.
c. The following costs were accrued for employee services: direct labor, $442,000; indirect labor, $150,000; selling and administrative
salaries, $295,000.
d. Incurred various selling and administrative expenses (e.g, advertising, sales travel costs, and finished goods warehousing),
$381,000
e. Incurred various additional manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $320,000.
f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during
the year.
g. Jobs costing $1,399,450 to manufacture according to their job cost sheets were completed during the year.
h. Jobs were sold on account to customers during the year for a total of $2,914,000. The jobs cost $1,409,000 to manufacture
according to their job cost sheets.
The
company closes any over- or under-applied manufacturing overhead to Cost of Goods Sold. What is the gross margin for the year?
O 1,516,750
O 1,505,000
O 1,493,250
O none of the answers listed
01514 550
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