I’m needing help, I do t think I have the correct figures.. 8 4b Open Book Porti
ID: 2328961 • Letter: I
Question
I’m needing help, I do t think I have the correct figures.. 8 4b Open Book Portion of Chapters 14 & 15 Test Name 1. BITCO maintains Its the general ledger (in T-account a Web-based general ledger, Overhead is applied on the basis of direct labot costs most of the entries that had been recorded for Jamuary. A peimtout of form ) showed the following: Bal. 1/1 10,000 Bal 1/1 4,000 17.500 Accounts Payable Finished Goods Inv Bal. 1/31 9,000 Bal. 1/31 13,000 Factory Overhead Cost of Goods Sold A review of the prior year's financial statements, the current year's budget, and January's source documents produced the following information: (I) Accounts Payable are used for raw material purchases only. January purchases were $49,000. (2) Factory overhead costs for January were $17,000 none of which is indirect materials. (3) The January I balance for finished goods inventory was $10,000. (4) There was a single job in process at January 31 with a cost of $2,000 for direct materials and S1.50 for direct labor. (5) Total cost of goods manufactured for January was $90,000. (6) All direct laborers earn the same rate ($13/hour). During January, 2,500 direct labor hours were worked. (7) The predetermined overhead allocation rate is based on direct labor costs. Budgeted (expected) overhead for the year is $195,000 and budgeted (expected) direct labor is $390,000. Fill in the missing amounts a through o above in the T-accounts above.
Explanation / Answer
a)Raw material purchase = 49000
b)Raw material used= Beginning + purchase -ending raw material
= 10000+49000-17500
= 41500
c)Direct material = Total material used- indirect material
= 41500-0
= 41500
d)Direct labor = 2500*13 = 32500
e)estimated overhead rate= estimated overhead /estimated direct labor cost
= 195000/390000
= .50 or 50% of direct labor cost
OVerhead applied= 32500*.50 = 16250
f)costof goods manufactured = 90000
g)Ending goods in process inventory = beginning +direct material +direct labor+ overhead applied- cost of goods manufactured
= 4000+41500+32500+16250-90000
= 4250
h)Amount paid to payables =beginning +purchase -ending payables
= 5000+49000-9000
= 45000
i=purchase of raw material = 49000
j= beginning finished goods inventory = 10000
k)cost of goods manufactured = 90000
L)cost of goods sold =beginning FG+cost of goods manufactured- ending FG
= 10000+90000-15000
= 85000
M)Actual overhead = 17000
n)Applied overhead = 16250
o)cost of goods sold= 85000
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