a. Raw materials purchased on account, $211,000. b. Raw materials used in production, $189,000 ($151,200 direct materials and $37,800 indirect materials). c. Accrued direct labor cost of $49,000 and indirect labor cost of $22,000. d. Depreciation recorded on factory equipment, $105,000. e. Other manufacturing overhead costs accrued during October, $129,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,200 machine-hours were used in October. g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $453,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 28% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $33,000.
a. Raw materials purchased on account, $211,000. b. Raw materials used in production, $189,000 ($151,200 direct materials and $37,800 indirect materials). c. Accrued direct labor cost of $49,000 and indirect labor cost of $22,000. d. Depreciation recorded on factory equipment, $105,000. e. Other manufacturing overhead costs accrued during October, $129,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,200 machine-hours were used in October. g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $453,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 28% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $33,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:a. Raw materials purchased on account, $211,000.
b. Raw materials used in production, $189,000 ($151,200 direct materials and $37,800 indirect materials).
c. Accrued direct labor cost of $49,000 and indirect labor cost of $22,000.
d. Depreciation recorded on factory equipment, $105,000.
e. Other manufacturing overhead costs accrued during October, $129,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of
76,200 machine-hours were used in October.
g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h. Jobs that had cost $453,000 to complete according to their job cost sheets were shipped to customers during the month. These
jobs were sold on account at 28% above cost.
Required:
1. Prepare journal entries to record the transactions given above.
2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account.
Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $33,000.
Transcribed Image Text:Required 1
Beginning balance
Ending balance
Required 2
Debit
Manufacturing Overhead
Credit
Debit
Beginning balance
Ending balance
Work in Process
Credit
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