Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Chapter 4, Problem 14P
Using the chart of accounts in Figure 2-1, determine the changes to the
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Dream House Builders, Inc. applies overhead by linking it to direct labor. At the start of the current period, management predicts total direct labor costs of $100,000 and total overhead costs of $20,000. On January 31, the direct labor for this job equals $2,700. Complete the following journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
What is the balance in the Cost of Goods Sold account after the adjustment?
Compute One Stop’s gross profit earned on the jobs sold, after adjusting for the manufacturing overhead variance
Post the appropriate entries to Materials Inventory, Work-in-Process Inventory and Finished Goods Inventory accounts and determine each account balance on July 31, the end of the month.
Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods
inventory account at the beginning of the month was S76,500 and at the end of the month was $69,750.
The cost of goods manufactured for the month was $350,300. The actual manufacturing overhead cost
incurred was $114,700 and the manufacturing overhead cost applied to jobs was $108,500. The adjusted
cost of goods sold that would appear on the income statement for July is:
A. S350,300
B. $363,250
C. S356,500
D. $344,100
Chapter 4 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 4 - Define committed costs and provide two examples of...Ch. 4 - Why is labor seldom a committed cost?Ch. 4 - Prob. 3DQCh. 4 - What are overbillings and how do they occur?Ch. 4 - Prob. 5DQCh. 4 - What are the six key principals of internal...Ch. 4 - What should you look for in a construction...Ch. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - Prob. 10P
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- Bangor Products Co. obtained the following information from its records for April: Required: 1. Prepare, in summary form, the journal entries that would have been made during the month to record issuing materials to production, the distribution of labor, and overhead costs; the completion of the jobs; and the sale of the jobs. 2. Prepare schedules computing the following for April: a. The gross profit or loss for each job completed and for the business as a whole. b. For each job, the gross profit or loss per unit. (Round to the nearest cent.)arrow_forwardMarzons records show raw materials Inventory had a beginning balance of $200 and an ending balance of $300. If the cost of materials used during the month was $900, what were the purchases made during the month?arrow_forwardThayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.arrow_forward
- Kalamazoo corporation has provided data concerning the company's manufacturing overhead account for the month of July. Prior to the closing of the overapplied or underapplied balance to cost of goods sold, the total of the debits to the manufacturing overhead account was $53,000 and the total of the credits to the account was $73,000. Which of the following statements is true? Manufacturing overhead for the month was overapplied by $20,000 Manufacturing overhead applied to work in process for the month was $63,000 Manufacturing overhead transferred from finished goods to cost of goods sold during the month was $73,000 Actual manufacturing overhead for the month was $63,000 None of the above. Please explain answer.arrow_forwardAt the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to increase or decase and by how much? check_circleAnswer Step 1 Underapplied overhead: When there is a debit balance in the manufacturing overhead account during the month end, it indicates that overheads applied to jobs are less than the actual overhead cost incurred by the business. Therefore, the debit balance in the manufacturing overhead account is referred to as underapplied overhead. Overapplied overhead: When there is a credit balance in the manufacturing overhead account during the month end, indicates that overheads applied to jobs is more than the actual overhead cost incurred by the business. Therefore, the credit balance in the manufacturing overhead account is referred to as overapplied overhead. Step 2 Calculate the overapplied or underapplied overhead. help_outlinefullscreen Step 3…arrow_forwardA company’s Factory Overhead account shows total debits of $624,000 and total credits of $646,000 at the end of the year. Prepare the journal entry to close the balance in the Factory Overhead account to Cost of Goods Sold.arrow_forward
- A company's Factory Overhead account shows total debits of $675,000 and total credits of $698,700 at the end of the year. 1. Compute the under- or overapplied overhead. 2. Prepare the journal entry to close the balance in the Factory Overhead account to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the under- or overapplied overhead. Total actual overhead cost Total applied overhead costarrow_forwardCerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $52,900 and at the end of the month was $43,300. The cost of goods manufactured for the month was $259,000. The actual manufacturing overhead cost incurred was $154,800 and the manufacturing overhead cost applied to Work in Process was $143,000. The adjusted cost of goods sold that would appear on the income statement for July is: $280,400 S249,400 S268,600 $256,800arrow_forwardPlease answer thesearrow_forward
- Cao Inc. has worked on the following jobs during the first quarter of the year. The list of each job along with the balance of the total costs incurred at the end of the quarter is provided below: Job no. Ending Balance Job No. 221 $1,350 Job No. 222 $1,270 Job No. 223 $1,580 Job No. 224 $1,690 Job No. 225 $960 During the first quarter, jobs 221, 222, and 223 were completed; jobs 221 and 223 were sold on account for $2,000 and $2,380 respectively. What would the ending balance of the Work-in-process inventory account be? Group of answer choices $2,650 $2,930 $1,270 $4,200arrow_forwardCao Inc. has worked on the following jobs during the first quarter of the year. The list of each job along with the balance of the total costs incurred at the end of the quarter is provided below: Job no. Ending Balance Job No. 221 $1,350 Job No. 222 1,270 Job No. 223 1,580 Job No. 224 1,690 Job No. 225 960 During the first quarter, jobs 221, 222, and 223 were completed; jobs 221 and 223 were sold on account for $2,000 and $2,380 respectively. Compute the ending balance of finished goods inventory. Group of answer choices $2,650 $4,200 $1,270 $2,930arrow_forwardCao Inc. has worked on the following jobs during the first quarter of the year. The list of each job along with the balance of the total costs incurred at the end of the quarter is provided below: Job no. Ending Balance Job No. 221 $1,350 Job No. 222 1,270 Job No. 223 1,580 Job No. 224 1,690 Job No. 225 960 During the first quarter, jobs 221, 222, and 223 were completed; jobs 221 and 223 were sold on account for $2,000 and $2,380 respectively. What would the journal entry to record the costs of completed job during the first quarter be? Group of answer choices Debit: Finished goods inventory $4,200 and Credit: Work-in-process inventory $4,200 Debit: Work-in-process inventory $2,650 and Credit: Finished goods inventory $2,650 Debit: Finished goods inventory $1,270 and Credit: Work-in-process inventory $1,270 Debit: Work-in-process inventory $2,930 and Credit Finished goods inventory $2,930arrow_forward
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