Lamonda Corporation uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below: The following transactions occurred during April: a. Purchased materials on account at a cost of $232,870. b. Requisitioned materials at a cost of $112,200, of which $16,500 was for general factory use. c. Recorded unpaid factory labor of $224,900, of which $42,375 was indirect. d. Incurred other costs: Selling expense Factory utilities Administrative expenses Factory rent Factory depreciation $ 34,200 22,800 50,450 11,500 20,800 e. Applied overhead at a rate equal to 134 percent of direct labor cost. f. Completed jobs costing $263,550. g. Sold jobs costing $323,370. h. Recorded sales revenue (on account) of $509,000. Required: 1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. 3-a. Compute over- or underapplied manufacturing overhead. 3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will Cost of Goods Sold increase or decrease? 4. Prepare Lamonda's cost of goods manufactured report for April. 5. Prepare Lamonda's April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or underapplied manufact overhead
Lamonda Corporation uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below: The following transactions occurred during April: a. Purchased materials on account at a cost of $232,870. b. Requisitioned materials at a cost of $112,200, of which $16,500 was for general factory use. c. Recorded unpaid factory labor of $224,900, of which $42,375 was indirect. d. Incurred other costs: Selling expense Factory utilities Administrative expenses Factory rent Factory depreciation $ 34,200 22,800 50,450 11,500 20,800 e. Applied overhead at a rate equal to 134 percent of direct labor cost. f. Completed jobs costing $263,550. g. Sold jobs costing $323,370. h. Recorded sales revenue (on account) of $509,000. Required: 1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. 3-a. Compute over- or underapplied manufacturing overhead. 3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will Cost of Goods Sold increase or decrease? 4. Prepare Lamonda's cost of goods manufactured report for April. 5. Prepare Lamonda's April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or underapplied manufact overhead
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Lamonda Corporation uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below:
The following transactions occurred during April:
a. Purchased materials on account at a cost of $232,870.
b. Requisitioned materials at a cost of $112,200, of which $16,500 was for general factory use.
c. Recorded unpaid factory labor of $224,900, of which $42,375 was indirect.
d. Incurred other costs:
Selling expense
Factory utilities
Administrative expenses
Factory rent
Factory depreciation
$ 34,200
22,800
50,450
11,500
20,800
e. Applied overhead at a rate equal to 134 percent of direct labor cost.
f. Completed jobs costing $263,550
g. Sold jobs costing $323,370.
h. Recorded sales revenue (on account) of $509,000.
Required:
1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April.
3-a. Compute over- or underapplied manufacturing overhead.
3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will Cost of Goods Sold increase or
decrease?
4. Prepare Lamonda's cost of goods manufactured report for April.
5. Prepare Lamonda's April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or
underapplied manufacturing overhead.
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