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Use the information below to answer the following two questions: Ginseng Inc. uses a normal cost system to account for jobs it produces and closes out any over- or under-applied manufacturing overhead directly to Cost of Goods Sold at the end of each quarter. Beginning balances from the Balance Sheet on January 1 are shown in the table below. The table uses the following abbreviations: RM = Raw Materials Inventory A/P = Accounts Payable R/E = Retained Earnings WIP = Work in Process Inventory FG = Finished Goods Inventory Beg = Beginning Balance End = Ending Balance MOH = Manufacturing Overhead PP&E = Property, Plant & Equipment A summary of transactions completed in the quarter are shown below in $1,000's: Raw materials purchased on account b. Raw materials used in production (75% were direct; the remainder indirect) a. 22 24 100 Salaries & wages paid in cash (70% direct; 20% indirect; 10% selling & admin) d. Depreciation on PP&E (90% manufacturing; the remainder selling & admin) e. Factory utility expenses paid on account f. Advertising expenses paid in cash g. Manufacturing overhead applied to production c. $ 50 60 34 18 S 105 204 h. Cost of goods manufactured i. Cash sales to customers j. Cost of goods sold (unadjusted) 375 180 k. Underapplied or overapplied overhead closed entirely to Cost of Goods Sold ? To answer the following two questions, enter the numbers relevant for each calculation into the table below using positive numbers to designate increases to an account balance and negative numbers to designate decreases. Cash RM WIP FG МОН PP&E A/P R/E Beg $39 $89 $14 $19 $0 $120 $28 $253 a. b. с. d. e. f. g. h. i. j. k. End

Use the information below to answer the following two questions: Ginseng Inc. uses a normal cost system to account for jobs it produces and closes out any over- or under-applied manufacturing overhead directly to Cost of Goods Sold at the end of each quarter. Beginning balances from the Balance Sheet on January 1 are shown in the table below. The table uses the following abbreviations: RM = Raw Materials Inventory A/P = Accounts Payable R/E = Retained Earnings WIP = Work in Process Inventory FG = Finished Goods Inventory Beg = Beginning Balance End = Ending Balance MOH = Manufacturing Overhead PP&E = Property, Plant & Equipment A summary of transactions completed in the quarter are shown below in $1,000's: Raw materials purchased on account b. Raw materials used in production (75% were direct; the remainder indirect) a. 22 24 100 Salaries & wages paid in cash (70% direct; 20% indirect; 10% selling & admin) d. Depreciation on PP&E (90% manufacturing; the remainder selling & admin) e. Factory utility expenses paid on account f. Advertising expenses paid in cash g. Manufacturing overhead applied to production c. $ 50 60 34 18 S 105 204 h. Cost of goods manufactured i. Cash sales to customers j. Cost of goods sold (unadjusted) 375 180 k. Underapplied or overapplied overhead closed entirely to Cost of Goods Sold ? To answer the following two questions, enter the numbers relevant for each calculation into the table below using positive numbers to designate increases to an account balance and negative numbers to designate decreases. Cash RM WIP FG МОН PP&E A/P R/E Beg $39 $89 $14 $19 $0 $120 $28 $253 a. b. с. d. e. f. g. h. i. j. k. End

FINANCIAL ACCOUNTING
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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Use the information below to answer the following two questions: Ginseng Inc. uses a normal cost system to account for jobs it produces and closes out any over- or under-applied manufacturing overhead directly to Cost of Goods Sold at the end of each quarter. Beginning balances from the Balance Sheet on January 1 are shown in the table below. The table uses the following abbreviations: RM = Raw Materials Inventory A/P = Accounts Payable R/E = Retained Earnings WIP = Work in Process Inventory FG = Finished Goods Inventory Beg = Beginning Balance End = Ending Balance MOH = Manufacturing Overhead PP&E = Property, Plant & Equipment A summary of transactions completed in the quarter are shown below in $1,000's: Raw materials purchased on account b. Raw materials used in production (75% were direct; the remainder indirect) a. 22 24 100 Salaries & wages paid in cash (70% direct; 20% indirect; 10% selling & admin) d. Depreciation on PP&E (90% manufacturing; the remainder selling & admin) e. Factory utility expenses paid on account f. Advertising expenses paid in cash g. Manufacturing overhead applied to production c. $ 50 60 34 18 S 105 204 h. Cost of goods manufactured i. Cash sales to customers j. Cost of goods sold (unadjusted) 375 180 k. Underapplied or overapplied overhead closed entirely to Cost of Goods Sold ? To answer the following two questions, enter the numbers relevant for each calculation into the table below using positive numbers to designate increases to an account balance and negative numbers to designate decreases. Cash RM WIP FG МОН PP&E A/P R/E Beg $39 $89 $14 $19 $0 $120 $28 $253 a. b. с. d. e. f. g. h. i. j. k. End
Transcribed Image Text:Use the information below to answer the following two questions: Ginseng Inc. uses a normal cost system to account for jobs it produces and closes out any over- or under-applied manufacturing overhead directly to Cost of Goods Sold at the end of each quarter. Beginning balances from the Balance Sheet on January 1 are shown in the table below. The table uses the following abbreviations: RM = Raw Materials Inventory A/P = Accounts Payable R/E = Retained Earnings WIP = Work in Process Inventory FG = Finished Goods Inventory Beg = Beginning Balance End = Ending Balance MOH = Manufacturing Overhead PP&E = Property, Plant & Equipment A summary of transactions completed in the quarter are shown below in $1,000's: Raw materials purchased on account b. Raw materials used in production (75% were direct; the remainder indirect) a. 22 24 100 Salaries & wages paid in cash (70% direct; 20% indirect; 10% selling & admin) d. Depreciation on PP&E (90% manufacturing; the remainder selling & admin) e. Factory utility expenses paid on account f. Advertising expenses paid in cash g. Manufacturing overhead applied to production c. $ 50 60 34 18 S 105 204 h. Cost of goods manufactured i. Cash sales to customers j. Cost of goods sold (unadjusted) 375 180 k. Underapplied or overapplied overhead closed entirely to Cost of Goods Sold ? To answer the following two questions, enter the numbers relevant for each calculation into the table below using positive numbers to designate increases to an account balance and negative numbers to designate decreases. Cash RM WIP FG МОН PP&E A/P R/E Beg $39 $89 $14 $19 $0 $120 $28 $253 a. b. с. d. e. f. g. h. i. j. k. End
Expert Solution
Step 1

Calculation of manufacturing overhead 

Salaries & wages (70% x 50) 35
Depreciation on PP&E (90% x 60) 54
Factory utility expenses  34
Actual manufacturing overhead  123
Less: Manufacturing overhead applied 105
Under applied overhead 18
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