Flow of costs using job Order Costing System to ABC Corporation. Initial Inventories : Raw Material ,
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Question:
Flow of costs using job Order Costing System to ABC Corporation.
Initial Inventories :
- Raw Material , $ 20,000
- Work in process , $ 15,000
- Finished goods , $ 30,000
The company applies overhead cost to jobs on the basis of MACHINE HOURS WORKED. For the year the company cost accountants estimated $450,000 of total overhead cost for a estimated activity level of 75,000 MHW
The followings transactions were recorded for the year:
- Purchased on account $ 410,000 in RM
- Issue of direct and indirect materials – requisitioned from the storeroom for use in production $380,00 ($360,000 of direct and $20,000 of indirect materials)
- Labor cost : employee time tickets included $75,000 recorded direct and $110,000 indirect labor, Sales commissions $90,000 and administrative salaries, $ 200,000
- Manufacturing overhead costs:
- Utilities ………………. $ 43,000
- Advertising costs were, $ 180,000
- Depreciation, $350,000 ( 80% relates to factory operations, 20% administrative functions)
- Insurance expired , $10,000 ( 70% relates to factory operations, 30% administrative activities)
- APPLYING OVERHEAD TO PRODUCTION
- Due to greater demand for its products , the company worked 80,000 machine hours .
- Goods costing $900,000 to manufacturing were completed during the year
- Goods were sold on account to customers for a total of $ 1,500,000. The goods cost $ 870,000
REQUIREMENTS
- Present journal entries to record each transactions
Prepare t account and posting the transactions and calculate ending balances balances
Prepare the cost of goods manufactured and income statement for roger company
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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