Required: Prepare T-accounts to show the flow of costs in the system. Any difference between actual and applied overhead for the period should be debited or credited to Cost of Goods Sold. (Do not round "cost per unit" calculations and round other intermediate calculations to the nearest whole dollar.)
Vermont Company uses continuous processing to produce stuffed bears and FIFO
Overhead is applied on the basis of direct labor costs, and the application rate has not changed over the period covered by the problem. The Work-in-Process Inventory account showed the following balances at the start of the current period:
| Direct materials | $ | 142,000 | |
| Direct labor | 315,000 | ||
| Overhead applied | 441,000 | ||
These costs were related to 63,000 units that were in process at the start of the period.
During the period, 71,000 units were transferred to finished goods inventory. Of the units finished during this period, 70 percent were sold. After units have been transferred to finished goods inventory, no distinction is made between the costs to complete beginning work-in-process inventory and the costs of goods started and completed in work in process this period.
The equivalent units for materials this period were 72,000 (using FIFO). Of these, 14,400 were equivalent units with respect to materials in the ending work-in-process inventory. Materials costs incurred during the period totaled $316,900.
Conversion costs of $1,470,000 were charged this period for 73,500 equivalent units (using FIFO). The ending inventory consisted of 27,500 equivalent units of conversion costs. The actual manufacturing overhead for the period was $770,000.
Required:
Prepare T-accounts to show the flow of costs in the system. Any difference between actual and applied overhead for the period should be debited or credited to Cost of Goods Sold. (Do not round "cost per unit" calculations and round other intermediate calculations to the nearest whole dollar.)
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