Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures pecialty heavy equipment for...
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Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures pecialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhend cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that eatimated S360,000 of manufacturing overhead for an estimated allocation base of 900 direct tabor-hours. The following transactions took place during the year. a. Raw materials purchased on account, S200,000. b. Raw materials used in production (all direct materials), $185,000. e. Utility bills incurred on account, $70,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Drect labor (975 hours) $230,000 Incirect labor $90,000 Selling and administrative salaries $ 110,000 e. Maintenance costa incurred on account in the factory, S54,000. E. Advertising costs incurred on account, $136.000. g Depreciation was recorded for the year, S95.000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $120,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities). i Manufacturing overhead cost was applied to jobs, S 2. j Cost of goods manufactured for the year, $770.000. k. Sales for the year (all on account) totaled S1,200,000. These goods cost S800,000 according to their job cost aheets. Page 141 The balances in the inventory accounts at the beginning of the year were. Raw Materials Work in Process $21,000 $30,000 Finished Goods $60,000 Required: 1. Prepare journal entries to record thé preceding transactions. 2. Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above ) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. 3. Prepare a schedule of cost of goods manufactured. 4. Prepare a journal entry to elose any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of coat of goods sold. 5. Prepare an income statement for the year. Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures pecialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhend cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that eatimated S360,000 of manufacturing overhead for an estimated allocation base of 900 direct tabor-hours. The following transactions took place during the year. a. Raw materials purchased on account, S200,000. b. Raw materials used in production (all direct materials), $185,000. e. Utility bills incurred on account, $70,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Drect labor (975 hours) $230,000 Incirect labor $90,000 Selling and administrative salaries $ 110,000 e. Maintenance costa incurred on account in the factory, S54,000. E. Advertising costs incurred on account, $136.000. g Depreciation was recorded for the year, S95.000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $120,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities). i Manufacturing overhead cost was applied to jobs, S 2. j Cost of goods manufactured for the year, $770.000. k. Sales for the year (all on account) totaled S1,200,000. These goods cost S800,000 according to their job cost aheets. Page 141 The balances in the inventory accounts at the beginning of the year were. Raw Materials Work in Process $21,000 $30,000 Finished Goods $60,000 Required: 1. Prepare journal entries to record thé preceding transactions. 2. Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above ) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. 3. Prepare a schedule of cost of goods manufactured. 4. Prepare a journal entry to elose any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of coat of goods sold. 5. Prepare an income statement for the year.
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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