PROBLEM 1

The information below has been taken from the cost records of Tink Co. for the past year:

Direct materials used in production $326

Direct labor 225

OH allocated at 60% of DL$ ?

Actual OH 145

Cost of goods available for sale 826

Sales revenue 900

Selling & administrative expenses 30

Inventories:

Beginning Ending

Work in process 80 30

Finished goods ? 110

SHOW ALL COMPUTATIONS:

1. Prepare a statement of cost of goods manufactured & sold for T Co.

(use normal costing)

2. Prepare the closing entry for OH using COGS
3. Prepare the Income Statement.