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Allocate the common cost to Factory, Sales, and Administrative with a solution

Allocate the common cost to Factory, Sales, and Administrative with a solution

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Allocate the common cost to Factory, Sales, and Administrative with a solution.

The following information were obtained from the records of Sunshine Enterprise for the current year ended December 31: Cash 19800 Accounts Receivable Raw Materials Inventory Jan 1 44000 70000 Raw Materials Inventory Dec 31 Work in Process Jan 1 Work in Process Dec 31 Finished Goods Jan 1 80000 15000 42000 109900 Finished Goods Dec 31 155000 Indirect Labor 50000 Direct Labor 142500 Factory supplies used 30000 Freight in Advertising Expense 9000 16000 Sales Salaries 25000 Administrative Salaries Bad Debt Expense Allowance for Bad Debts Direct Material Purchases Sales 41000 5000 3100 137500 471000 The costs below are common costs incurred by various facilities to be allocated as follows: (Hint: Costs allocated to Factory will be part of Factory Overhead) Total Costs Factory Administrative Sales 10% Utilities 25000 60% 30% Тахes 35000 60% 25% 15% 60% 20% 20% Insurance Depreciation 10000 30000 60% 20% 20%
Transcribed Image Text:The following information were obtained from the records of Sunshine Enterprise for the current year ended December 31: Cash 19800 Accounts Receivable Raw Materials Inventory Jan 1 44000 70000 Raw Materials Inventory Dec 31 Work in Process Jan 1 Work in Process Dec 31 Finished Goods Jan 1 80000 15000 42000 109900 Finished Goods Dec 31 155000 Indirect Labor 50000 Direct Labor 142500 Factory supplies used 30000 Freight in Advertising Expense 9000 16000 Sales Salaries 25000 Administrative Salaries Bad Debt Expense Allowance for Bad Debts Direct Material Purchases Sales 41000 5000 3100 137500 471000 The costs below are common costs incurred by various facilities to be allocated as follows: (Hint: Costs allocated to Factory will be part of Factory Overhead) Total Costs Factory Administrative Sales 10% Utilities 25000 60% 30% Тахes 35000 60% 25% 15% 60% 20% 20% Insurance Depreciation 10000 30000 60% 20% 20%
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