(Total: 15 marks) (1) Comfort, Inc produces custom-made furniture. The company uses a job-order costing system...

  

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(Total: 15 marks) (1) Comfort, Inc produces custom-made furniture. The company uses a job-order costing system and nomal costing to calculate its cost of goods manufactured. The company's policy is to price its job at cost plus 40% markup. On January 1, 2016, there was only one job (Job 202) in process with accumulated cost of $16,500. The company had the following balances as at January 1, 2016: Direct materials inventory $45,000 Finished goods inventory (for Job 101) $38,000 During the year 2016, the following events occurred: (1) Direct materials were purchased on account for $275,000. (2) Two more jobs were started: Job 303 and Job 404. (3) Direct materials and direct labour costs incurred by all jobs in process during the year 2016 are as follows: Job 202 Job 303 Job 404 Direct materials $180,000 $30,000 $10,000 Direct labour $104,000 $75,000 $12,600 The company incurred $233,500 of actual factory overhead during the year. Overheads are charged to jobs on the basis of 120% of direct labour cost. Estimated direct labour cost for 2016 is $198,000, Jobs 202 and 404 were completed and Jobs 101 and 202 were sold. Required (clearly show all supporting calculations) (a) Calculate the manufacturing cost and price of Job 202. (3 marks) (b) Calculate the amount of over- or under-applied overheads in 2016. How should the over- or under-applied overheads be treated? Explain. (2 marks) (c) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2016 (6 marks) (d) Calculate the ending balance for finished goods (FG) inventory as of December 31, 2016. (2 marks) (e) Show the journal entries to record the transfer of Work in Process to FG and from Finished Goods to Cost of Goods Sold for 2016. (2 marks) (Total: 15 marks) (1) Comfort, Inc produces custom-made furniture. The company uses a job-order costing system and nomal costing to calculate its cost of goods manufactured. The company's policy is to price its job at cost plus 40% markup. On January 1, 2016, there was only one job (Job 202) in process with accumulated cost of $16,500. The company had the following balances as at January 1, 2016: Direct materials inventory $45,000 Finished goods inventory (for Job 101) $38,000 During the year 2016, the following events occurred: (1) Direct materials were purchased on account for $275,000. (2) Two more jobs were started: Job 303 and Job 404. (3) Direct materials and direct labour costs incurred by all jobs in process during the year 2016 are as follows: Job 202 Job 303 Job 404 Direct materials $180,000 $30,000 $10,000 Direct labour $104,000 $75,000 $12,600 The company incurred $233,500 of actual factory overhead during the year. Overheads are charged to jobs on the basis of 120% of direct labour cost. Estimated direct labour cost for 2016 is $198,000, Jobs 202 and 404 were completed and Jobs 101 and 202 were sold. Required (clearly show all supporting calculations) (a) Calculate the manufacturing cost and price of Job 202. (3 marks) (b) Calculate the amount of over- or under-applied overheads in 2016. How should the over- or under-applied overheads be treated? Explain. (2 marks) (c) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2016 (6 marks) (d) Calculate the ending balance for finished goods (FG) inventory as of December 31, 2016. (2 marks) (e) Show the journal entries to record the transfer of Work in Process to FG and from Finished Goods to Cost of Goods Sold for 2016. (2 marks)

Answer rating: 100% (QA)

a Price of Job 202 Beginning work in process inventory 16500 Current period cost Direct materials 18... View the full answer