Honey Bee Manufacturing is a small company that manufactures heavy equipment for use in farming. The...
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Honey Bee Manufacturing is a small company that manufactures heavy equipment for use in farming. The company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of direct labour hours. At the beginning of the current year, the following estimates were made to compute the predetermined overhead rate: Manufacturing overhead cost: Direct labour hours Direct labour cost $448,000 25,600 $640,000 During the year the company purchased $295,000 of raw materials on credit. Sales commissions are 2.25% of sales and the corporate income tax rate is 14%. Selected adjusted "T" accounts for the year ended March 31, 2020 are as follows: opening $20,000 $295.000 ending opening unadjusted ending adjusted ending utilities indirect materials indirect labour RAW MATERIALS insurance $15,000 FINISHED GOODS $68,000 $1.434.000 $1,442,000 59,580 $59,580 $300.000 $65,000 $60,000 $283,750 $11,250 depreciation $60.000 $480,000 adjustment $10.000 MANUFACTURING OVERHEAD $420 adjustment opening direct materials 8 $1,434,0 direct labour $700,000 00 applied overhead adjusted ending adjusted ending $490.000 applied overhead WORK IN PROCESS unadjusted $40.000 ending $44,000 $240,000 commissions salaries insurance $490.000 $39,720 COST OF GOODS SOLD $1.442.0 00 $1,432,7 00 $280 $9,300 SALES OPERATING EXPENSES $45,000 $75,000 $5,850 $1,900,0 00 adjustme nt adjustme nt $490.000 Question 3 (continued) Required: depreciation $30,000 9 $155,850 1. Prepare a schedule of cost of goods manufactured for the year ended March 31, 2020. (10.5 marks) Question 3 (continued) 2. Prepare an income statement for the year ended March 31, 2020. 3. (8.5 marks) Briefly explain why the Work in Progress, Finished Goods and Cost of Goods Sold accounts have adjusted ending balances. (3 marks) 11 Honey Bee Manufacturing is a small company that manufactures heavy equipment for use in farming. The company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of direct labour hours. At the beginning of the current year, the following estimates were made to compute the predetermined overhead rate: Manufacturing overhead cost: Direct labour hours Direct labour cost $448,000 25,600 $640,000 During the year the company purchased $295,000 of raw materials on credit. Sales commissions are 2.25% of sales and the corporate income tax rate is 14%. Selected adjusted "T" accounts for the year ended March 31, 2020 are as follows: opening $20,000 $295.000 ending opening unadjusted ending adjusted ending utilities indirect materials indirect labour RAW MATERIALS insurance $15,000 FINISHED GOODS $68,000 $1.434.000 $1,442,000 59,580 $59,580 $300.000 $65,000 $60,000 $283,750 $11,250 depreciation $60.000 $480,000 adjustment $10.000 MANUFACTURING OVERHEAD $420 adjustment opening direct materials 8 $1,434,0 direct labour $700,000 00 applied overhead adjusted ending adjusted ending $490.000 applied overhead WORK IN PROCESS unadjusted $40.000 ending $44,000 $240,000 commissions salaries insurance $490.000 $39,720 COST OF GOODS SOLD $1.442.0 00 $1,432,7 00 $280 $9,300 SALES OPERATING EXPENSES $45,000 $75,000 $5,850 $1,900,0 00 adjustme nt adjustme nt $490.000 Question 3 (continued) Required: depreciation $30,000 9 $155,850 1. Prepare a schedule of cost of goods manufactured for the year ended March 31, 2020. (10.5 marks) Question 3 (continued) 2. Prepare an income statement for the year ended March 31, 2020. 3. (8.5 marks) Briefly explain why the Work in Progress, Finished Goods and Cost of Goods Sold accounts have adjusted ending balances. (3 marks) 11
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Question 3 continued Required 1 Prepare a schedule of cost of goods manufactured for the year ended ... View the full answer
Related Book For
Basic Business Statistics Concepts and Applications
ISBN: 978-0132168380
12th edition
Authors: Mark L. Berenson, David M. Levine, Timothy C. Krehbiel
Posted Date:
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