Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $351,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $265,000. b. Raw materials used in production (all direct materials), $250,000. c. Utility bills incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: $ 295,000 $ 103,000 $ 175,000 Direct labor (980 hours) Indirect labor Selling and administrative salaries e. Maintenance costs incurred on account in the factory, $67,000 f. Advertising costs incurred on account, $149,000. g. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $110,000 (75% related to factory facilities, and the remainder related to selling and administrative facilities). i. Manufacturing overhead cost was applied to jobs, $_ ? . j. Cost of goods manufactured for the year, $900,000. k. Sales for the year (all on account) totaled $1,850,000. These goods cost $930,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: $ 43,000 $ 34,000 $ 73,000 Raw Materials Work in Process Finished Goods
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $351,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $265,000. b. Raw materials used in production (all direct materials), $250,000. c. Utility bills incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: $ 295,000 $ 103,000 $ 175,000 Direct labor (980 hours) Indirect labor Selling and administrative salaries e. Maintenance costs incurred on account in the factory, $67,000 f. Advertising costs incurred on account, $149,000. g. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $110,000 (75% related to factory facilities, and the remainder related to selling and administrative facilities). i. Manufacturing overhead cost was applied to jobs, $_ ? . j. Cost of goods manufactured for the year, $900,000. k. Sales for the year (all on account) totaled $1,850,000. These goods cost $930,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: $ 43,000 $ 34,000 $ 73,000 Raw Materials Work in Process Finished Goods
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter2: Accounting For Materials
Section: Chapter Questions
Problem 15E: Kenkel, Ltd. uses backflush costing to account for its manufacturing costs. The trigger points are...
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2. Post your entries to T-accounts. (Don’t forget to enter the beginning inventory balances above.)
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![Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil
fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor-
hours. Its predetermined overhead rate was based on a cost formula that estimated $351,000 of manufacturing overhead for an
estimated allocation base of 900 direct labor-hours. The following transactions took place during the year:
a. Raw materials purchased on account, $265,000.
b. Raw materials used in production (all direct materials), $250,000.
c. Utility bills incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative
activities).
d. Accrued salary and wage costs:
Direct labor (980 hours)
$ 295,000
$ 103,000
$ 175,000
Indirect labor
Selling and administrative salaries
e. Maintenance costs incurred on account in the factory, $67,000
f. Advertising costs incurred on account, $149,000.
g. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and
administrative equipment).
h. Rental cost incurred on account, $110,000 (75% related to factory facilities, and the remainder related to selling and administrative
facilities).
i. Manufacturing overhead cost was applied to jobs, $_ ?.
j. Cost of goods manufactured for the year, $900,000.
k. Sales for the year (all on account) totaled $1,850,000. These goods cost $930,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were:
$ 43,000
$ 34,000
$ 73,000
Raw Materials
Work in Process
Finished Goods](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb3cceb08-d813-4c33-867e-f04bf1a14253%2F9a0bde1a-a41f-4fb3-95dc-916cefc80dad%2Fq3gadsn_processed.png&w=3840&q=75)
Transcribed Image Text:Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil
fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor-
hours. Its predetermined overhead rate was based on a cost formula that estimated $351,000 of manufacturing overhead for an
estimated allocation base of 900 direct labor-hours. The following transactions took place during the year:
a. Raw materials purchased on account, $265,000.
b. Raw materials used in production (all direct materials), $250,000.
c. Utility bills incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative
activities).
d. Accrued salary and wage costs:
Direct labor (980 hours)
$ 295,000
$ 103,000
$ 175,000
Indirect labor
Selling and administrative salaries
e. Maintenance costs incurred on account in the factory, $67,000
f. Advertising costs incurred on account, $149,000.
g. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and
administrative equipment).
h. Rental cost incurred on account, $110,000 (75% related to factory facilities, and the remainder related to selling and administrative
facilities).
i. Manufacturing overhead cost was applied to jobs, $_ ?.
j. Cost of goods manufactured for the year, $900,000.
k. Sales for the year (all on account) totaled $1,850,000. These goods cost $930,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were:
$ 43,000
$ 34,000
$ 73,000
Raw Materials
Work in Process
Finished Goods
![Required:
1. Prepare journal entries to record the preceding transactions.
2. Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.)
3. Prepare a schedule of cost of goods manufactured.
4A. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
4B. Prepare a schedule of cost of goods sold.
5. Prepare an income statement for the year.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3
Req 4A
Req 4B
Req 5
Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb3cceb08-d813-4c33-867e-f04bf1a14253%2F9a0bde1a-a41f-4fb3-95dc-916cefc80dad%2Foh3c2z_processed.png&w=3840&q=75)
Transcribed Image Text:Required:
1. Prepare journal entries to record the preceding transactions.
2. Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.)
3. Prepare a schedule of cost of goods manufactured.
4A. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
4B. Prepare a schedule of cost of goods sold.
5. Prepare an income statement for the year.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3
Req 4A
Req 4B
Req 5
Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.)
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