ssuming that Sheffield closes under- or overapplied overhead to Cost of Goods Sold, calculate the cost of goods sold for the year. Calculate adjusted cost of goods sold. 3. Assuming that Sh
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
1. Calculate under- or overapplied
2. Assuming that Sheffield closes under- or overapplied overhead to Cost of Goods Sold, calculate the cost of goods sold for the year. Calculate adjusted cost of goods sold.
3. Assuming that Sheffield prorates under- or overapplied overhead to the appropriate accounts, calculate the adjusted Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold balances for the year.
![Sheffield Corp. designs and manufactures mascot uniforms for high school, college, and professional sports teams. Since each team's
uniform is unique in color and design, Sheffield uses a job order costing system. On January 1, the T-accounts for some of Sheffield's
primary balance sheet accounts were as follows:
Raw Materials Inventory
Work in Process Inventory
1/1
59,400
1/1
25,500
Finished Goods
Cash
1/1
38,600
1/1
37,200
Accounts Receivable
Accounts Payable
1/1
47,300
1/1
41,900](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb8a4644e-c0f7-45ab-8ca0-b43744e710eb%2F19b78544-c9fb-48c7-95c3-7980819c278b%2F641tmt_processed.jpeg&w=3840&q=75)
![During the year, the following events occurred:
1.
Sheffield purchased raw materials costing $113,000 on account.
Sheffield used $149,300 of raw materials in production. Of these, 80% were classified as direct materials and 20% as
indirect materials. (Sheffield maintains a single Raw Materials Inventory account.)
2.
Sheffield used 31,900 hours of direct labor. The company's average direct labor rate was $12 per hour (credit Wages
Payable).
3.
4.
The company's indirect labor cost was $168,000 (credit Wages Payable).
5.
Other manufacturing overhead costs the company incurred on account totaled $95,400.
6.
Sheffield applied $316,800 in manufacturing overhead.
7.
The company completed production of goods costing $837,200.
8.
The company's Cost of Goods Sold balance was $843,600 before adjusting for over- or underapplied overhead.
9.
Sales revenue was $1,040,000 (all sales were made on account).
10. Sheffield collected $803,200 from customers.
11. The company paid accounts payable of $201,300.
12. At year-end, all wages earned during the year had been paid.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb8a4644e-c0f7-45ab-8ca0-b43744e710eb%2F19b78544-c9fb-48c7-95c3-7980819c278b%2F8cvoic_processed.jpeg&w=3840&q=75)
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