Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $540,000, and management budgeted 37,500 direct labor-hours. The company had no Materials, Work-In-Process, or Finished Goods Inventory at the beginning of April. These transactions were recorded during April: 1. April Insurance cost for the manufacturing property and equipment was $2,200. The premium had been paid in January. 2. Recorded $1,305 depreciation on an administrative asset. 3. Purchased 21 pounds of high-grade polishing materials at $16 per pound (indirect materials). The purchase was on credit. 4. Paid factory utility bill, $6,830, in cash. 5. Incurred 4,000 hours and paid payroll costs of $160,000. Of this amount, 1,000 hours and $20,000 were indirect labor costs. 6. Incurred and paid other factory overhead costs, $6,510. 7. Purchased $28,500 of materials. Direct materials included unpolished semiprecious stones and gold. Indirect materials included supplies and polishing materials. The purchase was on credit. 8. Requisitioned $22,500 of direct materials and $2,400 of indirect materials from Materials Inventory. 9. Incurred and paid miscellaneous selling and administrative expenses, $6,780. 10. Incurred $4,345 depreciation on manufacturing equipment for April. 11. Paid advertising expenses in cash, $3,250. 12. Applied factory overhead to production on the basis of direct labor hours. 13. Completed goods costing $68,000 during the month. 14. Made sales on account in April, $66,090. The Cost of Goods Sold was $54,580. Prepare a schedule of Cost of Goods Manufactured. Prepare a schedule of Cost of Goods Sold. Prepare the income statement for April
Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $540,000, and management budgeted 37,500 direct labor-hours. The company had no Materials, Work-In-Process, or Finished Goods Inventory at the beginning of April. These transactions were recorded during April: 1. April Insurance cost for the manufacturing property and equipment was $2,200. The premium had been paid in January. 2. Recorded $1,305 depreciation on an administrative asset. 3. Purchased 21 pounds of high-grade polishing materials at $16 per pound (indirect materials). The purchase was on credit. 4. Paid factory utility bill, $6,830, in cash. 5. Incurred 4,000 hours and paid payroll costs of $160,000. Of this amount, 1,000 hours and $20,000 were indirect labor costs. 6. Incurred and paid other factory overhead costs, $6,510. 7. Purchased $28,500 of materials. Direct materials included unpolished semiprecious stones and gold. Indirect materials included supplies and polishing materials. The purchase was on credit. 8. Requisitioned $22,500 of direct materials and $2,400 of indirect materials from Materials Inventory. 9. Incurred and paid miscellaneous selling and administrative expenses, $6,780. 10. Incurred $4,345 depreciation on manufacturing equipment for April. 11. Paid advertising expenses in cash, $3,250. 12. Applied factory overhead to production on the basis of direct labor hours. 13. Completed goods costing $68,000 during the month. 14. Made sales on account in April, $66,090. The Cost of Goods Sold was $54,580. Prepare a schedule of Cost of Goods Manufactured. Prepare a schedule of Cost of Goods Sold. Prepare the income statement for April
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
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:Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $540,000, and management budgeted 37,500 direct labor-hours. The
company had no Materials, Work-in-Process, or Finished Goods Inventory at the beginning of April. These transactions were recorded during April:
1. April insurance cost for the manufacturing property and equipment was $2,200. The premium had been paid in January.
2. Recorded $1,305 depreciation on an administrative asset.
3. Purchased 21 pounds of high-grade polishing materials at S16 per pound (indirect materials). The purchase was on credit.
4. Paid factory utility bill, $6,830, in cash.
5. Incurred 4,000 hours and paid payroll costs of $160,000. Of this amount, 1,000 hours and $20,000 were indirect labor costs.
6. Incurred and paid other factory overhead costs, $6,510.
7. Purchased $28,500 of materials. Direct materials included unpolished semiprecious stones and gold. Indirect materials included supplies and polishing materials. The purchase was on credit.
8. Requisitioned $22,500 of direct materials and $2,400 of indirect materials from Materials Inventory.
9. Incurred and paid miscellaneous selling and administrative expenses, $6,780.
10. Incurred $4,345 depreciation on manufacturing equipment for April.
11. Paid advertising expenses in cash, $3,250.
12. Applied factory overhead to production on the basis of direct labor hours.
13. Completed goods costing $68,000 during the month.
14. Made sales on account in April, $66,090. The Cost of Goods Sold was $54,580.
Prepare a schedule of Cost of Goods Manufactured.
Prepare a schedule of Cost of Goods Sold.
Prepare the income statement for April.
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