Allbright Ltd manufactures wooden furniture. It uses a job costing system that applies factory overhead on the
Question:
Allbright Ltd manufactures wooden furniture. It uses a job costing system that applies factory overhead on the basis of direct labour hours. Budgeted factory overhead for the year 2020 was $1,235,475, and management budgeted 86 700 direct labour hours. Allbright Ltd had no direct materials, indirect materials, work-in-process, or finished goods inventory at the beginning of February 2020. The following transactions were recorded during February
1. Purchased 5 000 square meters of oak on account at $25 per square meter.
2. Purchased 50 litres of glue on account at $36 per litre (indirect material).
3. Requisitioned 3 500 square meters of oak and 30.5 litres of glue for production.
4. Incurred and paid payroll costs of $187,900. Of this amount, $46,000 were indirect labour costs; direct labour personnel earned $22 per hour.
5. Paid factory utility bill, $15,230 in cash.
6. February's insurance cost for the manufacturing property and equipment was $3,500. The premium had been paid in January.
7. Recorded $8,200 depreciation on manufacturing equipment for February.
8. Recorded $2,400 depreciation on an administrative asset for February.
9. Paid advertising expenses in cash, $5,500.
10. Incurred and paid other factory overhead costs, $13,500.
11. Incurred miscellaneous selling and administrative expenses, $13,250.
12. Applied factory overhead to production on the basis of direct labour hours.
13. Completed goods costing $146,000 manufactured during the month.
14. Sales on account in February were $132,000. The cost of goods sold was $112,000.
Calculate the amount of overapplied or underapplied overhead to be closed to the Cost of Goods Sold account on 29 February 2020.
How does one compile a schedule of costs of goods manufactured for February 2020.
and how doews one compile an income statement for February 2020. Ignoring income tax.
Cost Management A Strategic Emphasis
ISBN: 978-0077733773
7th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins