Boothe Company uses job order cost accumulation and applies overhead based on direct labor hours. Any under
Question:
Boothe Company uses job order cost accumulation and applies overhead based on direct labor hours. Any under applied or over applied overhead is adjusted directly to Cost of Goods Sold at the end of each month. On April 1, job cost sheets indicated the following:
On April 30, Finished Goods contained only Jobs 204 and 207, which had the following total costs:
Besides working on Jobs 204 and 207 in April, the company continued work on Jobs 202 and 203 and started work on Jobs 205 and 206. A summary of direct materials used and direct labor hours worked on Jobs 202, 203, 205, and 206 during April showed the following:
Other information:(a) On April 30, the only jobs still in process were 203 and 206.
(b) All workers are paid $20 per hour. Wage rates have been stable throughout the year.(c) The company maintains only one raw materials account (Materials Control) from which it issues both direct and indirect materials. The balance in this account was $2,700 on April 1.(d) All sales are billed on account at 150% of total cost.
(e) Other items in April:Depreciation,
Factory Equipment .....................................$ 1,375
Raw Materials Purchased ................................................. 11,550
Indirect Labor .................................................................. 2,500
Factory Rent and Utilities ............................................... 2,700
Indirect Materials Used .................................................. 2,790
Required:
(1) Determine the April 30 balances for Materials Control and for Work in Process.
(2) Prepare all journal entries required for Job 202 in April.
(3) Calculate the cost of goods manufactured in April. (A complete statement of cost of goods manufactured is not required.)
(4) Calculate the over applied or under applied overhead for April.
(5) Calculate gross profit for April.
Expert Answer:
