Partially completed T-accounts and additional information for Dumfries Designs for the month of August follow: Work-in-Process Inventory Finished Goods Inventory Debit Credit Credit Materials Inventory Debit BB (8/1) 167,400 684,400 Cost of Goods Sold Credit Debit 612,400 Credit Debit BB (8/1) Labor 309,400 824,000 Manufacturing Overhead Control Debit Credit 709,740 BB (8/1) 591,400 969,600 • This company has no indirect materials or supplies. • The company applies manufacturing overhead on the basis of direct labor-hours. Required: a. What was the cost of direct materials issued to production during August? b. What was the over- or underapplied manufacturing overhead for August? c. What was the manufacturing overhead application rate in August? Additional information for August follows: • The labor wage rate was $40 per hour. • During the month, sales revenue was $1,754,000, and selling and administrative costs were $327,000. 779,900 Applied Manufacturing Overhead Debit Credit 700,400 d. What was the cost of products completed during August? e. What was the balance of the Work-in-Process Inventory account at the end of August? f. What was the operating profit for August? Any over- or underapplied overhead is written off to Cost of Goods Sold.
Partially completed T-accounts and additional information for Dumfries Designs for the month of August follow: Work-in-Process Inventory Finished Goods Inventory Debit Credit Credit Materials Inventory Debit BB (8/1) 167,400 684,400 Cost of Goods Sold Credit Debit 612,400 Credit Debit BB (8/1) Labor 309,400 824,000 Manufacturing Overhead Control Debit Credit 709,740 BB (8/1) 591,400 969,600 • This company has no indirect materials or supplies. • The company applies manufacturing overhead on the basis of direct labor-hours. Required: a. What was the cost of direct materials issued to production during August? b. What was the over- or underapplied manufacturing overhead for August? c. What was the manufacturing overhead application rate in August? Additional information for August follows: • The labor wage rate was $40 per hour. • During the month, sales revenue was $1,754,000, and selling and administrative costs were $327,000. 779,900 Applied Manufacturing Overhead Debit Credit 700,400 d. What was the cost of products completed during August? e. What was the balance of the Work-in-Process Inventory account at the end of August? f. What was the operating profit for August? Any over- or underapplied overhead is written off to Cost of Goods Sold.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Partially completed T-accounts and additional information for Dumfries Designs for the month of August follow:
Work-in-Process Inventory
Finished Goods Inventory
Debit
Credit
Credit
Materials Inventory
Debit
BB (8/1) 167,400
684,400
Cost of Goods Sold
Credit
Debit
612,400
Credit
Debit
BB (8/1)
Labor
309,400
824,000
Manufacturing Overhead Control
Debit
Credit
709,740
BB (8/1) 591,400
969,600
• This company has no indirect materials or supplies.
• The company applies manufacturing overhead on the basis of direct labor-hours.
Required:
a. What was the cost of direct materials issued to production during August?
b. What was the over- or underapplied manufacturing overhead for August?
c. What was the manufacturing overhead application rate in August?
Additional information for August follows:
• The labor wage rate was $40 per hour.
• During the month, sales revenue was $1,754,000, and selling and administrative costs were $327,000.
779,900
Applied Manufacturing Overhead
Debit
Credit
700,400
d. What was the cost of products completed during August?
e. What was the balance of the Work-in-Process Inventory account at the end of August?
f. What was the operating profit for August? Any over- or underapplied overhead is written off to Cost of Goods Sold.
Expert Solution
Step 1 Introduction
Total Manufacturing Cost :— It is the sum of direct material used, direct labour and manufacturing overhead applied.
Cost of Goods Manufactured :— It is the total cost incurred in the manufacturing of completed finished goods during the period.
Operating Profit :— It is the difference between sales revenue and operating expenses.
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