The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: Purchased $396,010 of materials. Used $340,050 of direct materials in production. Incurred $294,400 of direct labor wages. Applied factory overhead at a rate of 76% of direct labor cost. Transferred $812,120 of work in process to finished goods. Sold goods with a cost of $791,220. Sold goods for $1,404,390. • Incurred $316,650 of selling expenses. • Incurred $126,730 of administrative expenses. Required: a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Colons (:) will fill in where needed. b. Determine the inventory balances at the end of the first month of operations. Inventory Balances b. Determine the inventory balances at the end of the first month of operations. Materials inventory, June 30 $55,960.00 Work in process inventory, June 30 Finished goods inventory, June 30 $20,900.00 %24

The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: Purchased $396,010 of materials. Used $340,050 of direct materials in production. Incurred $294,400 of direct labor wages. Applied factory overhead at a rate of 76% of direct labor cost. Transferred $812,120 of work in process to finished goods. Sold goods with a cost of $791,220. Sold goods for $1,404,390. • Incurred $316,650 of selling expenses. • Incurred $126,730 of administrative expenses. Required: a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Colons (:) will fill in where needed. b. Determine the inventory balances at the end of the first month of operations. Inventory Balances b. Determine the inventory balances at the end of the first month of operations. Materials inventory, June 30 $55,960.00 Work in process inventory, June 30 Finished goods inventory, June 30 $20,900.00 %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Vaughn Church Furniture manufactures custom pews, altars, and pulpits for churches across the southern United States. Since each order is unique, Vaughn uses a job order costing system. During the month of June, Vaughn worked on orders for three churches: Faith Church, Grace Church, and Hope Church. Production on the Faith and Grace orders began in May, and the Faith job was completed in June. Production on the Hope order began in June and was incomplete at the end of the month. Vaughn applies overhead to each job based on machine hours. Prior to the year, managers had estimated manufacturing overhead at $ 693,000, along with 21,000 machine hours. Additional cost information related to the three orders is as follows: Faith Grace Hope Beginning balance, June 1 $ 4,000 $ 2,800 Direct materials, June $ 8,300 $ 6,500 $ 4,000 Direct labor, June $ 13,000 $7,000 $ 5,500 Manufacturing OH, June ? ? Machine hours, June 2,200 1,300 1,400
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