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Overhead:
Direct Material Cost:
Direct material cost is the cost that a company incurs while manufacturing a certain product or service. It includes all the cost and expenses that are directly associated with the production such as raw materials.
Direct Labor Cost:
Direct labor cost is the cost that a company incurs in giving wages to the people that are directly associated with the production work.
Journal Entries:
Journal entries are the entries that are made in the books of accounts to record every transaction that happens in the business in the chronological order.
Accounting rules for journal entries:
- To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
- To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
Adjusted
It is a statement which contain balances of all account after all the
Income Statement:
It is a financial statement which show the
It shows the financial position of a firm. It consists of asset and liabilities.
1.
To Prepare: Journal Entries.
2.
To prepare: T account for factory overhead and
3.
To Prepare: Trial balance.
4.
To prepare: The income statement.
5.
To prepare: Balance sheet.
5
To Explain: The impact of error on the income statement and the balance sheet at December 31, 2017.
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Chapter 15 Solutions
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- In 2020, it cost Jason Manufacturing $14 per unit to produce component R8. In 2021, it has increased to $18 per unit. In 2021, Eastern Supplies has offered to provide component R8 for $11 per unit to Jason. As it pertains to the make-or-buy decision, which statement is true? a. Net relevant costs are $3 per unit b. Incremental revenues are $4 per unit c. Differential costs are $7 per unit d. Incremental costs are $4 per unitarrow_forwardPlease provide the answer to this general accounting question using the right approach.arrow_forwardThe Frida Corporation reported total manufacturing costs of $245,000; manufacturing overhead totaling $68,000 and direct materials totaling $57,000. How much is direct labor cost?arrow_forward
- helparrow_forwardAt the beginning of the year, a company predicts total direct materials costs of $920,000 and total overhead costs of $1,150,000. If the company uses direct materials costs as its activity base to allocate overhead, what is the predetermined overhead rate it should use during the year?arrow_forwardCompute the required purchases for julyarrow_forward
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