Operating data for the Abraham Company for fiscal 2020 are presented below. Abraham has one building,...
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Operating data for the Abraham Company for fiscal 2020 are presented below. Abraham has one building, and the space in the building is divided about equally between manufacturing and retailing. Approximately 20% of the labor costs incurred in manufacturing are for supervisory labor, and the remaining 80% of the salaries are paid to employees directly engaged in manufacturing jobs for clients. Purchases of raw material in 2020 $220,000 Manufacturing labor cost incurred $500,000 Salaries of sales force $112,000 Operating expenses for the building $90,000 Vacation pay and employee benefits for factory workers $74,000 Retail selling and administrative expenses $282,000 $25,000 $16,000 $110,000 Depreciation expense for delivery trucks Safety training for production workers Depreciation of factory equipment Raw materials inventory, 12/31/19 Raw materials inventory, 12/31/20 Work in progress inventory, 12/31/19 $42,000 $36,000 $18,000 Work in progress inventory, 12/31/20 $20,000 Finished goods inventory, 12/31/19 $44,000 $50,000 Finished goods inventory, 12/31/20 Applied manufacturing overhead in 2020 Sales revenue $300,000 $1,600,000 Setting aside your answer to the question on Abraham's manufacturing overhead, assume that the actual cost of overhead is $280,000, the applied manufacturing overhead in 2020 is $300,000 (as originally stated in the problem), and the cost of goods sold before considering the amount of overapplied or underapplied overhead is $900,000. Compute the cost of goods sold for 2020 after adjusting for the overapplied/underapplied overhead (do not prorate). Show your work and/or explain your answer in order to receive full credit. Operating data for the Abraham Company for fiscal 2020 are presented below. Abraham has one building, and the space in the building is divided about equally between manufacturing and retailing. Approximately 20% of the labor costs incurred in manufacturing are for supervisory labor, and the remaining 80% of the salaries are paid to employees directly engaged in manufacturing jobs for clients. Purchases of raw material in 2020 $220,000 Manufacturing labor cost incurred $500,000 Salaries of sales force $112,000 Operating expenses for the building $90,000 Vacation pay and employee benefits for factory workers $74,000 Retail selling and administrative expenses $282,000 $25,000 $16,000 $110,000 Depreciation expense for delivery trucks Safety training for production workers Depreciation of factory equipment Raw materials inventory, 12/31/19 Raw materials inventory, 12/31/20 Work in progress inventory, 12/31/19 $42,000 $36,000 $18,000 Work in progress inventory, 12/31/20 $20,000 Finished goods inventory, 12/31/19 $44,000 $50,000 Finished goods inventory, 12/31/20 Applied manufacturing overhead in 2020 Sales revenue $300,000 $1,600,000 Setting aside your answer to the question on Abraham's manufacturing overhead, assume that the actual cost of overhead is $280,000, the applied manufacturing overhead in 2020 is $300,000 (as originally stated in the problem), and the cost of goods sold before considering the amount of overapplied or underapplied overhead is $900,000. Compute the cost of goods sold for 2020 after adjusting for the overapplied/underapplied overhead (do not prorate). Show your work and/or explain your answer in order to receive full credit.
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Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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