Christophers Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of
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Christophers Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of the current year follow:Raw Materials Inventory$ Work in Process InventoryFinished Goods InventoryThe following transactions occurred during January:Purchased materials on account for $Issued materials to production totaling $ percent of which was traced to specific jobs and the remainder of which was treated as indirect materials.Payroll costs totaling $ were recorded as follows:$ for assembly workers$ for factory supervision$ for administrative personnel$ for sales commissionsRecorded depreciation: $ for factory machines, $ for the copier used in the administrative office.Recorded $ of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense.Paid $ in other factory costs in cash.Applied manufacturing overhead at a rate of percent of direct labor cost.Completed all jobs but one; the job cost sheet for the uncompleted job shows $ for direct materials, $ for direct labor, and $ for applied overhead.Sold jobs costing $ The revenue earned on these jobs was $ With this information please answer the following question. Part a: determine how much gross profit the company would report during the month of january before any adjustments is made for the overhead balance.
Part b: determing the amount and if its over or underapplied.
Part c: compute the adjusted gross profit assuming that the any over or under balance is adjusted directly to cost of goods.
Related Book For
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
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