BlueJays Inc. manufactures softball/baseball gloves. They use leather (direct material), glue (indirect material) and labor (direct). The glue gets lumped in with all other manufacturing overhead costs throughout the year. At the beginning of the year, management determined the following: Budgeted Total Overhead $350,000 Cost Base Machine Hours Machine Hours 50,000 Leather per Glove $10.00/Glove 01/01/2020 Balances BOY Leather $20,000 BOY WIP $15,000 BOY Finished Goods $27,000 BOY COGS $0 At the end of the year, BlueJays produced 55,000 finished gloves, using $495,000 of leather and $434000 of overhead, including the glue. In the process, they used 52,000 machine hours. Their end of year balances are as follows: 12/31/2020 Balances EOY Leather $12,000 EOY WIP $17,000 EOY Finished Goods $20,000 EOY COGS ???????? 12/31/2020 MOH Balances EOY Leather $0 EOY WIP $8,000 EOY Finished Goods $11,000 EOY COGS $345,000 REQUIRED: a) Calculate the total allocated b) Using the following information combined with the already provided information, calculate COGS before any adjusting entries:           Direct Materials purchased during the year: $485000          Direct Labor used during the year:                $600,000 c) Close the MOH-Control and MOH-Allocated accounts using the "write-off" to COGS approach. Show all journal entries d)Close the MOH-Control and MOH-Allocated accounts using the proration - ending account balances approach. Show all journal entries.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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BlueJays Inc. manufactures softball/baseball gloves. They use leather (direct material), glue (indirect material) and labor (direct). The glue gets lumped in with all other manufacturing overhead costs throughout the year. At the beginning of the year, management determined the following:

Budgeted

Total Overhead

$350,000

Cost Base

Machine Hours

Machine Hours

50,000

Leather per Glove

$10.00/Glove

01/01/2020 Balances

BOY Leather

$20,000

BOY WIP

$15,000

BOY Finished Goods

$27,000

BOY COGS

$0

At the end of the year, BlueJays produced 55,000 finished gloves, using $495,000 of leather and $434000 of overhead, including the glue. In the process, they used 52,000 machine hours. Their end of year balances are as follows:

12/31/2020 Balances

EOY Leather

$12,000

EOY WIP

$17,000

EOY Finished Goods

$20,000

EOY COGS

????????

12/31/2020 MOH Balances

EOY Leather

$0

EOY WIP

$8,000

EOY Finished Goods

$11,000

EOY COGS

$345,000

REQUIRED:

  1. a) Calculate the total allocated
  2. b) Using the following information combined with the already provided information, calculate COGS before any adjusting entries

         Direct Materials purchased during the year: $485000

         Direct Labor used during the year:                $600,000

  1. c) Close the MOH-Control and MOH-Allocated accounts using the "write-off" to COGS approach. Show all journal entries

d)Close the MOH-Control and MOH-Allocated accounts using the proration - ending account balances approach. Show all journal entries.

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