Smart Phones are Dumb Inc. (here forward known as “SPADI”), led by their CEO, Harvey Hodge (here forward known as “Harv”) is a manufacturer of smart phones for home use. SPADI is based out of Rockland County and uses a job order costing system. Inventory balances at 1/1/21 were as follows: Raw materials $ 80,000 Work in process $ 60,000 Finished goods $ 30,000 The company applies overhead using a predetermined overhead rate based on machine hours. At the beginning of the year, they estimated that it works 30,000 machine hours and incur $ 360,000 in manufacturing overhead. The following transactions were recorded for 2021. Raw Materials purchased $ 180,000 Raw Materials were requisitioned into production in the amount of $200,000, 90% of this was direct materials, the other 10% were for indirect supplies The following employee costs were incurred during 2021, labor in the assembly plant $ 240,000, factory janitor $ 35,000, administrative salaries $95,000. Advertising sales expense incurred $ 15,000 Factory utilities $ 25,000 Fire insurance on Factory for policy period 7/1/21 thru 6/30/22 = $120,000 Depreciation for the year, using the straight -line basis was $ 200,000 for the factory and $ 80,000 for office equipment Manufacturing overhead was applied to jobs. SPADI actual machine hour activity for 2021 turned out to be 30,500 hours. Goods completed and transferred to finished goods were $ 700,000 Phones were sold for $ 875,000 that per the job costs sheets cost 640,000 Close out misapplied overhead (if any) as applicable to COGS SPADI collected all its sales, paid off all salaries payable and paid off $300,000 of accounts payable Prepare appropriate journal entries for a thru l above; assume transactions a thru k are recorded on account. Post activity to T accounts. Prepare income statement in good form period ended 12.31.21. Dont answer in handwritten way thanku
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.
Smart Phones are Dumb Inc. (here forward known as “SPADI”), led by their CEO, Harvey Hodge (here forward known as “Harv”) is a manufacturer of smart phones for home use. SPADI is based out of Rockland County and uses a job order costing system.
Inventory balances at 1/1/21 were as follows:
Raw materials $ 80,000
Work in process $ 60,000
Finished goods $ 30,000
The company applies
- Raw Materials purchased $ 180,000
- Raw Materials were requisitioned into production in the amount of $200,000, 90% of this was direct materials, the other 10% were for indirect supplies
- The following employee costs were incurred during 2021, labor in the assembly plant $ 240,000, factory janitor $ 35,000, administrative salaries $95,000.
- Advertising sales expense incurred $ 15,000
- Factory utilities $ 25,000
- Fire insurance on Factory for policy period 7/1/21 thru 6/30/22 = $120,000
Depreciation for the year, using the straight -line basis was $ 200,000 for the factory and $ 80,000 for office equipment- Manufacturing overhead was applied to jobs. SPADI actual machine hour activity for 2021 turned out to be 30,500 hours.
- Goods completed and transferred to finished goods were $ 700,000
- Phones were sold for $ 875,000 that per the
job costs sheets cost 640,000 - Close out misapplied overhead (if any) as applicable to COGS
- SPADI collected all its sales, paid off all salaries payable and paid off $300,000 of accounts payable
Prepare appropriate
Dont answer in handwritten way thanku
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