Chapter 3.A, Problem 6P

Transaction Analysis
Brooks Corporation uses a Job-order costing system to apply manufacturing costs to jobs. The company closes its under-applied or to cost of its balance sheet March 1 is as follows:

During March thecompany completed the following transactions:

a. Purchased raw materials for cash, $69,000.
b. Raw material used in production $77,000 ($67,000 was directmaterials and $10,000 was indirect materials).
c. Paid $178,000 of salaries and wages in cash ($102, 000 was direct labor, $23,000 was Indirect labor, and $53,000 was related to employees responsible for selling and administration).
d. Various manufacturing overhead costs paid in cash to support production, $41,000.
e. Depreciation recorded on property, plant, and equipment, $35,000 (85% related to manufacturing equipment and 15% related to that support and administration).
f. Various selling expenses incurred on account, $27,000.
g. Prepaid insurance expired during the month, $450 (60% related to production, and 40% related to selling and administration).
h. Manufacturing overhead applied to production, $101,000.
i. Cost of goods manufactured, $_____ ? . (Hint: The Work Process balance on March 31 is $5,000.)
j. Cash sales to customer $429,000.
k. Cost of goods sold (unadjusted), $______ ? . (Hint: The Finished Goods balance at March 31 is $6,000.)
l. Cash payments to creditors, $35,000.
m. Under applied orover applied overhead $________?.

Required:

1. Calculate the ending balances that would be reported on the company’s balance at March 31. You can derive your answers using Microsoft Excel Exhibit 3A-2 as your guide, or you can use paper, pencil, and a calculator. (Hint: Be sure to calculate the under-applied or over-applied and thenaccount for its effect on the balance sheet,)
2. Prepare Brooks Corporation’s schedule of costof goods manufactured for the month ended March 31. You can derive answers usingMicrosoft Excel and Exhibit 3A -3 as your guide, or you can use paper, pencil, and a calculator.
3. Prepare Brooks Corporation's schedule of cost of goods sold for the month ended March 31. You can derive your answers using Microsoft Excel and Exhibit 3A-4as your guide, or you can use paper, pencil, and a calculator.
4. Prepare Brooks Corporation's income statement for the month ended March 31. You can derive youranswers using Microsoft Excel and Exhibit 3A-5 as your guide, or you can usepaper, pencil, and a calculator.