6. ZECO is a company that produces fire trucks. The company uses a normal job-order costing...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
6. ZECO is a company that produces fire trucks. The company uses a normal job-order costing system to calculate its cost of goods manufactured. The company's policy is to price its job at cost plus 30% markup. On January 1, 2020, there was only one job in process, with the following costs: Direct materials Direct labour Applied overhead Total Job 200 $13,500 18,000 27,000 $58,500 The following balances were taken from the company's general ledger as of January 1, 2020: Direct materials inventory $45,000 Finished goods inventory (for Job 100) 85,000 During the year 2020, the following events occurred: • Direct materials were purchased on account for $375,000. • Two more jobs were started: Job 300 and Job 400. Direct materials and direct labour costs incurred by each job in process during the year 2020 were as follows: Job 200 Job 300 Job 400 Direct materials $150,000 $45,000 $35,000 Direct labour 130,000 45,000 25,000 • The company incurred the following actual factory overhead during the year: $135,000 55,500 85,750 Factory rent Factory supplies Indirect labour • Jobs 100 and 200 were sold. • Jobs 200 and 300 were completed. Instructions: a. Calculate the total applied overhead for the year 2020. The factory overhead costs are applied to each job on the basis of direct labour dollars. b. Determine whether the overhead is over-applied or under-applied. By how much? [3] [2] c. Prepare a schedule of cost of goods sold, identifying both normal and adjusted cost of goods sold, for the year ended December 31, 2020. [5] 6. ZECO is a company that produces fire trucks. The company uses a normal job-order costing system to calculate its cost of goods manufactured. The company's policy is to price its job at cost plus 30% markup. On January 1, 2020, there was only one job in process, with the following costs: Direct materials Direct labour Applied overhead Total Job 200 $13,500 18,000 27,000 $58,500 The following balances were taken from the company's general ledger as of January 1, 2020: Direct materials inventory $45,000 Finished goods inventory (for Job 100) 85,000 During the year 2020, the following events occurred: • Direct materials were purchased on account for $375,000. • Two more jobs were started: Job 300 and Job 400. Direct materials and direct labour costs incurred by each job in process during the year 2020 were as follows: Job 200 Job 300 Job 400 Direct materials $150,000 $45,000 $35,000 Direct labour 130,000 45,000 25,000 • The company incurred the following actual factory overhead during the year: $135,000 55,500 85,750 Factory rent Factory supplies Indirect labour • Jobs 100 and 200 were sold. • Jobs 200 and 300 were completed. Instructions: a. Calculate the total applied overhead for the year 2020. The factory overhead costs are applied to each job on the basis of direct labour dollars. b. Determine whether the overhead is over-applied or under-applied. By how much? [3] [2] c. Prepare a schedule of cost of goods sold, identifying both normal and adjusted cost of goods sold, for the year ended December 31, 2020. [5]
Expert Answer:
Answer rating: 100% (QA)
a The total applied overhead for the year 2020 is Overhe... View the full answer
Related Book For
Systems Analysis and Design
ISBN: 978-1133274636
9th Edition
Authors: Shelly Cashman, Gary B. Shelly and Harry J. Rosenblatt
Posted Date:
Students also viewed these accounting questions
-
City Bus Lines is developing an information system that will monitor passenger traffic, peak travel hours, and equipment requirements. The IT manager wants you to document a process called BALANCE...
-
Multiple Choice Questions: 1. An information system that supports a particular area of an organization, such as production or marketing, is called a: a. distributed data processing system. b....
-
In what way does thorough documentation for an information system help in compliance with regulations such as the Sarbanes-Oxley Act?
-
At the intersection of Texas Avenue and University Drive, a yellow subcompact car with mass 950 kg traveling east on University collides with a red pickup truck with mass 1900 kg that is traveling...
-
Distinguish between: a. individual A (a student), who spent the summer painting three houses. The contract for one house provided for a fixed fee; the contracts for the other two provided for a fee...
-
Buenolorl Company produces a well-known cologne. The standard manufacturing cost of the cologne is described by the following standard cost sheet: Management has decided to investigate only those...
-
The following errors and irregularities were discovered in the audit of the Trusty Company: 1. Cash was stolen from the cashier's desk. 2. Bad debt losses were high because credit was approved by...
-
Marple Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two officesone in Houston and one in Dallas. The firm...
-
2. The angle created by a 15 cm pendulum is given by the equation 0 (t) = .2 cos(8t) where is the angular displacement from the vertical in radians. a. How big is the angle at t = 3 seconds? Set...
-
The Garden Ornament Company manufactures two types of garden ornament a duck and a heron The information presented in Tables T1 to T5 has been prepared as a result of discussions by line managers for...
-
A company ships toys to other countries. 5 years ago they bought a new automatic packaging machine for $150,000. The annual operating, maintenance and insurance costs, as well as the market value of...
-
An engineer in 1950 was earning $5,700 a year. In 2020, she earned $93,000 a year. However, on average, prices in 2020 were higher than in 1950. What was her real income in 2020 in terms of constant...
-
What questions (at least two questions) will Creditors and Employees ask with financial statement information? Explain and provide some examples.
-
Leo Company reported sales of $ 2 5 0 , 0 0 0 during Year 2 . Assume that all sales are credit sales. Leo's balance sheets for Year 2 and Year 1 showed ACCOUNTS Recievable Year 2 $ 1 1 0 , 0 0 0 $ 8...
-
How would I explain and teach my patient about the pathophysiology of autism using non-medical terminology?
-
Question 2 Lewis and Stark is a public accounting firm that offers two primary services, auditing and tax-return preparation. A controversy has developed between the partners of the two service lines...
-
Tamarisk Industries had one patent recorded on its books as of January 1, 2025. This patent had a book value of $364,800 and a remaining useful life of 8 years. During 2025, Tamarisk incurred...
-
A summary of changes in Pen Corporation's Investment in Sam account from January 1, 2011, to December 31, 2013, follows (in thousands): ADDITIONAL INFORMATION 1. Pen acquired its 80 percent interest...
-
What is a SWOT analysis and why is it important?
-
Perform research on the Internet to identify an ASP that offers Web-based business solutions, and write a brief memo describing the firm and its services.
-
Search the Internet for information about the history and development of UML.
-
Which of the following statements about the competence of evidence is always true? a. Evidence gathered by an auditor from third parties is reliable. b. Accounting data developed when control risk is...
-
A public company's audit committee should consist of: a. Representatives of management, shareholders, suppliers, and customers. b. The audit partner, chief financial officer, legal counsel, and at...
-
An independent auditor has been approached to perform an audit. Research suggests that the auditor may fail to: a. Distinguish between a regulated and nonregulated industry. b. Coordinate audit dates...
Study smarter with the SolutionInn App