Give t accounts for the following Part 1.Rhiner Corporation is a manufacturer that uses job-order costing. On January 1, thecompany's inventory balances were as follows:Raw materialsWork in processFinished goods$42,000$20,000$36,000The company applies overhead cost to jobs on the basis of direct labor-hours. For thecurrent year, the company's predetermined overhead rate of $16.50 per direct labor-hour was based on a cost formula that estimated $660,000 of total manufacturingoverhead for an estimated activity level of 40,000 direct labor-hours. The followingtransactions were recorded for the year:Raw materials were purchased on account, $520,000.Raw materials used in production, $465,000. All of the raw materials were usedas direct materials.The following costs were accrued for employee services: direct labor, $605,000,indirect labor, $150,000, selling and administrative salaries, $240,000.Incurred various selling and administrative expenses (e.g., advertising, salestravel costs, and finished goods warehousing), $357.000.• Incurred various manufacturing overhead costs (e g., depreciation, insurance,and utilities), $505,000.• Manufacturing overhead cost was applied to production. The company actuallV.worked 42,000 direct labor-hours on all jobs during the year.Jobs costing $1,685,000 to manufacture according to their job cost sheets werecompleted during the year.Jobs were sold on account to customers during the year for a total of $2,750,000.The jobs cost $1,695,000 to manufacture according to their job cost sheets.

Raw material A/C To opening Balance $ 42,000 By Raw material used in production $…

Answered: Give t accounts for the following

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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Give t accounts for the following

Part 1.
Rhiner Corporation is a manufacturer that uses job-order costing. On January 1, the
company's inventory balances were as follows:
Raw materials
Work in process
Finished goods
$42,000
$20,000
$36,000
The company applies overhead cost to jobs on the basis of direct labor-hours. For the
current year, the company's predetermined overhead rate of $16.50 per direct labor-
hour was based on a cost formula that estimated $660,000 of total manufacturing
overhead for an estimated activity level of 40,000 direct labor-hours. The following
transactions were recorded for the year:
Raw materials were purchased on account, $520,000.
Raw materials used in production, $465,000. All of the raw materials were used
as direct materials.
The following costs were accrued for employee services: direct labor, $605,000,
indirect labor, $150,000, selling and administrative salaries, $240,000.
Incurred various selling and administrative expenses (e.g., advertising, sales
travel costs, and finished goods warehousing), $357.000.
• Incurred various manufacturing overhead costs (e g., depreciation, insurance,
and utilities), $505,000.
• Manufacturing overhead cost was applied to production. The company actuallV.
worked 42,000 direct labor-hours on all jobs during the year.
Jobs costing $1,685,000 to manufacture according to their job cost sheets were
completed during the year.
Jobs were sold on account to customers during the year for a total of $2,750,000.
The jobs cost $1,695,000 to manufacture according to their job cost sheets.

Expert Solution

Step 1

Raw material A/C

To opening Balance	$ 42,000	By Raw material used in production	$ 465,000
To Purchase	$ 520,000	By Closing Balance	$ 97,000
Total	$ 562,000	Total	$ 562,000

2. Work in progress A/C

To Opening Balance	$ 20,000	By Finished Goods	$ 1, 685,000
To Raw materials used in production	$ 465,000	By Closing Balance	$ 1,168,000
To direct labor	$ 605,000
To Manufacturing overhead	$ 1763,000

Total	$ 2,853,000	Total	$ 2,853,000

Note:

Total amount of manufacturing overhead applied to production during the year is =

=FORMULA= direct Labor hours actually worked * per direct Labor hour

= 42,000 * $ 16.50

= $ 693,000

Total manufacturing cost added to work in progress is

Formula = Raw Materials + Direct Labor + Manufacturing overhead

= $ 465,000 + $ 605,000 + $ 693,000

= $ 1763,000

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