??? Nelson Company, which uses a job-order costing system, had the following account balances on January 1

???

Transcribed Image Text:

Nelson Company, which uses a job-order costing system, had the following account balances on January 1 of the current year: Raw Materials Work in Process Finished Goods The Work-in-Process and # 403 $25,600. The Finished Goods Inventory consisted of two jobs, # 399 $42,600 and #400 $46,300. Nelson uses a normal costing system with an overhead rate based on machine hours. The following budgeted information was available for 2020: Annual overhead costs $225,000 and machine hours 50,000. During the current year, the following transactions took place: a. Raw materials costing $120,000 were purchased on account. b. Total factory labor charges accrued were $375,000. C. A summary of material requisitions and time tickets appeared as follows: Time Tickets Job No. 401 402 403 404 405 406 407 408 $18,500 $67,200 $88,900 Inventory consisted of three jobs: #401 $14,700; # 402 $26,900; sub-total Indirect Material Requisitions $9,200 8,700 10,600 11,200 15,700 18,900 7,800 12,100 $94,200 6,800 $101,000 Labor Hours 600 $ 1,100 1,400 2,200 3,000 2,800 800 1,100 13,000 Labor Cost 14,400 26,400 33,600 52,800 72,000 67,200 19,200 26,400 $312,000 63,000 Total $375,000 d. Other factory costs include $76,000 of depreciation on factory equipment, $22,000 of expired factory insurance, $12,000 of accrued property taxes and $45,000 of miscellaneous factory costs paid in cash. Job Nos. 401, 402, 404, 406, and 408 were completed. Machine Hours Used 4,700 5,300 3,800 9,200 10,700 12,000 2,100 3,200 51,000 e. f. Job Nos. 399, 400, 402, 406, and 408 were sold for a total of $700,000 cash. a REQUIRED: A. What is the pre-determined annual overhead rate? B. Complete the attached cost flow diagram and job order cost sheets. Be sure to enter the beginning balances of the inventory accounts and be sure to compute ending balances for all accounts. C. Prepare all of the required journal entries for the year 2020 in the attached general journal. Raw Materials Inventory Factory Payroll Factory Overhead JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total Finished Goods Inventory TTT Process Inventory Work In JOB NO. DM DL OH Total JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total Cost of Goods Sold Expense JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total Nelson Company, which uses a job-order costing system, had the following account balances on January 1 of the current year: Raw Materials Work in Process Finished Goods The Work-in-Process and # 403 $25,600. The Finished Goods Inventory consisted of two jobs, # 399 $42,600 and #400 $46,300. Nelson uses a normal costing system with an overhead rate based on machine hours. The following budgeted information was available for 2020: Annual overhead costs $225,000 and machine hours 50,000. During the current year, the following transactions took place: a. Raw materials costing $120,000 were purchased on account. b. Total factory labor charges accrued were $375,000. C. A summary of material requisitions and time tickets appeared as follows: Time Tickets Job No. 401 402 403 404 405 406 407 408 $18,500 $67,200 $88,900 Inventory consisted of three jobs: #401 $14,700; # 402 $26,900; sub-total Indirect Material Requisitions $9,200 8,700 10,600 11,200 15,700 18,900 7,800 12,100 $94,200 6,800 $101,000 Labor Hours 600 $ 1,100 1,400 2,200 3,000 2,800 800 1,100 13,000 Labor Cost 14,400 26,400 33,600 52,800 72,000 67,200 19,200 26,400 $312,000 63,000 Total $375,000 d. Other factory costs include $76,000 of depreciation on factory equipment, $22,000 of expired factory insurance, $12,000 of accrued property taxes and $45,000 of miscellaneous factory costs paid in cash. Job Nos. 401, 402, 404, 406, and 408 were completed. Machine Hours Used 4,700 5,300 3,800 9,200 10,700 12,000 2,100 3,200 51,000 e. f. Job Nos. 399, 400, 402, 406, and 408 were sold for a total of $700,000 cash. a REQUIRED: A. What is the pre-determined annual overhead rate? B. Complete the attached cost flow diagram and job order cost sheets. Be sure to enter the beginning balances of the inventory accounts and be sure to compute ending balances for all accounts. C. Prepare all of the required journal entries for the year 2020 in the attached general journal. Raw Materials Inventory Factory Payroll Factory Overhead JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total Finished Goods Inventory TTT Process Inventory Work In JOB NO. DM DL OH Total JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total Cost of Goods Sold Expense JOB NO. Beg DM DL OH Total JOB NO. Beg DM DL OH Total

Answer rating: 100% (QA)

A Predetermined overhead rate 225000 50000 machine hours 450 per machine hour B Raw Materials Invent... View the full answer