Dori Hatami is the chief financial officer of Gotham Industries, a company that makes special-order sound systems
Question:
Dori Hatami is the chief financial officer of Gotham Industries, a company that makes special-order sound systems for home theaters. Her records for February revealed the following information:
Beginning inventory balances
Materials Inventory ………………………....….…$27,450
Work in Process Inventory ……………….………22,900
Finished Goods Inventory…………………….…..19,200
Direct materials purchased and received
6-Feb……………………………………...….........……..$7,200
12-Feb…………………………………............…………..8,110
24-Feb…………………………………............…………..5,890
Direct labor costs
14-Feb…………………………………..........……..…$13,750
28-Feb………………………………...........……….…..13,230
Direct materials requested for production
4-Feb……………………………............…………….…$9,080
13-Feb…………………………………............……….…5,940
25-Feb………………………………............………….…7,600
Job order cost cards for jobs in process on February 28 had the following totals:
The predetermined overhead rate for the month was 140 percent of direct labor costs. Sales for February totaled $152,400, which represented a 70 percent markup over the cost of production.
Required
1. Using T accounts for Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Overhead, Accounts Receivable, Factory Payroll, Sales, and Cost of Goods Sold, reconstruct the transactions in February.
2. Compute the cost of units completed during the month.
3. What was the total cost of goods sold during February?
4. Determine the ending balances in the inventory accounts.
5. During the first week of March, Jobs AJ-10 and AJ-14 were completed. No additional direct materials costs were incurred, but Job AJ-10 needed $720 more of direct labor, and Job AJ-14 needed an additional $1,140 of direct labor.
Job AJ-10 was 40 units; Job AJ-14, 55 units. Compute the product unit cost for each completed job (round to two decimal places).
Step by Step Answer:
Managerial Accounting
ISBN: 978-0618777181
8th Edition
Authors: Susan V. Crosson, Belverd E. Needles