Far West Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct material cost. Its predetermined overhead rate was based on a cost formula that estimated $500,000 of manufacturing overhead for an estimated allocation base of $390,625 direct material dollars. The company has provided the following data in the form of an Excel worksheet: Beginning $38,000 79,000 Ending $55,000 166,125 Raw Materials Work in Process Finished Goods 47,000 138,000 The following actual costs were incurred during the year: $450,000 $119,000 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect materials 104,875 Insurance, factory Depreciation of equipment Indirect labor 102,000 35,000 32,700 Property taxes Maintenance 41,000 23,425 Rent, building 49,000 Required: 4. Prepare a schedule of cost of goods sold for the year. Adjust the underapplied or overapplied overhead to cost of goods sold. 5. Prepare all journal entries related to manufacturing overhead. Besides indirect materials, indirect labor and depreciation, all other costs are recorded as accounts payable.

Far West Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct material cost. Its predetermined overhead rate was based on a cost formula that estimated $500,000 of manufacturing overhead for an estimated allocation base of $390,625 direct material dollars. The company has provided the following data in the form of an Excel worksheet: Beginning $38,000 79,000 Ending $55,000 166,125 Raw Materials Work in Process Finished Goods 47,000 138,000 The following actual costs were incurred during the year: $450,000 $119,000 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect materials 104,875 Insurance, factory Depreciation of equipment Indirect labor 102,000 35,000 32,700 Property taxes Maintenance 41,000 23,425 Rent, building 49,000 Required: 4. Prepare a schedule of cost of goods sold for the year. Adjust the underapplied or overapplied overhead to cost of goods sold. 5. Prepare all journal entries related to manufacturing overhead. Besides indirect materials, indirect labor and depreciation, all other costs are recorded as accounts payable.

Name: Far West Manufacturing Company operates a job-order costing system an
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Description: Far West Manufacturing Company operates a job-order costing system and appliesoverhead cost to jobs on the basis of direct material cost. Its predetermined overhead ratewas based on a cost formula that estimated $500,000 of manufacturing overhead fo

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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