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Bubble Firm had the following inventories. Jan 1, 2023 Finished goods Work in process $182,000 $202,000 $112,000 The following additional data pertains to operations. $160,000 $ 8,500 $200,000 $15,000 $ 26,000 Materials Material purchased Property Taxes Factory Direct labor Utilities-Factory Depreciation-Factory Equip Insurance-Factory $4,500 $277,500 $205,000 Dec 31, 2023 $ 93,000 $427,000 $ 80,000 Factory Supervisor Salaries Selling and Admin Expense Bubble Company applies manufacturing overhead at the rate of 60 percent of direct labor cost. Required: Compute the following amounts for the year of 2023 (show work). a. Assume Bubble Company wants to achieve a Gross Profit of 30% of Sales. Compute the dollar amount of Sales neede b. Was overhead under or over-applied? c.Bubble estimated overhead for the year to be $258,000, what amount was the original estimate for direct labor cost?

Bubble Firm had the following inventories. Jan 1, 2023 Finished goods Work in process $182,000 $202,000 $112,000 The following additional data pertains to operations. $160,000 $ 8,500 $200,000 $15,000 $ 26,000 Materials Material purchased Property Taxes Factory Direct labor Utilities-Factory Depreciation-Factory Equip Insurance-Factory $4,500 $277,500 $205,000 Dec 31, 2023 $ 93,000 $427,000 $ 80,000 Factory Supervisor Salaries Selling and Admin Expense Bubble Company applies manufacturing overhead at the rate of 60 percent of direct labor cost. Required: Compute the following amounts for the year of 2023 (show work). a. Assume Bubble Company wants to achieve a Gross Profit of 30% of Sales. Compute the dollar amount of Sales neede b. Was overhead under or over-applied? c.Bubble estimated overhead for the year to be $258,000, what amount was the original estimate for direct labor cost?

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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Bubble Firm had the following inventories. Jan 1, 2023 $182,000 $202,000 $112,000 The following additional data pertains to operations. $160,000 $8,500 Finished goods Work in process Materials Material purchased Property Taxes Factory Direct labor Utilities-Factory Depreciation-Factory Equip Insurance-Factory $200,000 $15,000 $ 26,000 $ 4,500 $277,500 $205,000 Dec 31, 2023 $ 93,000 $427,000 $ 80,000 Factory Supervisor Salaries Selling and Admin Expense Bubble Company applies manufacturing overhead at the rate of 60 percent of direct labor cost. Required: Compute the following amounts for the year of 2023 (show work). a.Assume Bubble Company wants to achieve a Gross Profit of 30% of Sales. Compute the dollar amount of Sales neede b. Was overhead under or over-applied? c.Bubble estimated overhead for the year to be $258,000, what amount was the original estimate for direct labor cost?
Transcribed Image Text:Bubble Firm had the following inventories. Jan 1, 2023 $182,000 $202,000 $112,000 The following additional data pertains to operations. $160,000 $8,500 Finished goods Work in process Materials Material purchased Property Taxes Factory Direct labor Utilities-Factory Depreciation-Factory Equip Insurance-Factory $200,000 $15,000 $ 26,000 $ 4,500 $277,500 $205,000 Dec 31, 2023 $ 93,000 $427,000 $ 80,000 Factory Supervisor Salaries Selling and Admin Expense Bubble Company applies manufacturing overhead at the rate of 60 percent of direct labor cost. Required: Compute the following amounts for the year of 2023 (show work). a.Assume Bubble Company wants to achieve a Gross Profit of 30% of Sales. Compute the dollar amount of Sales neede b. Was overhead under or over-applied? c.Bubble estimated overhead for the year to be $258,000, what amount was the original estimate for direct labor cost?
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show journal entry (for part b) assuming estimate is considered to be accurate.

and show a journal entry (from part b) assuming the amount is large enough to intentionally impact decision of users.

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