View Buddies Window Help hemi ork Froya Fabrikker A/S of Bergen, Norway, is a sm
ID: 2330469 • Letter: V
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View Buddies Window Help hemi ork Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures speciality heavy flelds. The company uses a job-order costing system that applies manufacturing hours. Its predetermined overhead rate was based on a cost formula that estimated $380,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year equipment for use in North Sea ol overhead cost to jobs on the basis of direct labor- a. Raw materials purchased on account, $275,000. b. Raw materials used in production (all direct materials) $260,000. c Utility bills incurred on account, $74 95% related to factory operations, and he remainder related to selling and administrative d. Accrued salary and wage costs: Direet labor (2,100 hours) Indireot labor Selling and administrative salaries 305,000 105,000 185,000 e. Maintenance costs incurred on account in the factory, S69,000 t Advertising costs incurred on account, $151,000. g. Depreciation was recorded for the year, $87 000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $112,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities). i Manufacturing overhead cost was applied to jobs, $? J. Cost of goods manufactured for the year, $920,000. The balances in the inventory accounts at the beginning of the year were: 45,000 $36,000 75,000 Pinisbed Gooda Required: Prev 4 of 4 NextExplanation / Answer
1 Requirement Prepare Journal entry to record the transaction of purchase of raw material Journal Entries Date Account Title Dr Amount Cr Amount a Raw Materials $275,000 To Accounts Payable $275,000 To record the purchase of raw materials to be used in production b WIP $260,000 To Raw Materials $260,000 to record the usage of raw materials requistioned for production c Manufacturing OH[$74000*95%] $70,300 Utilities Expense [$74000-$70300] $3,700 To Accounts Payable $74,000 to record the utility bills incurred relating to different activities d WIP $305,000 Manufacturing OH $105,000 Salaries Expenses $185,000 To Salaries and Wages Payable $595,000 to record the salary and wages cost incurred for different activities e Manufacturing OH $69,000 To Accounts Payable $69,000 to record the maintenance cost incurred f Advertising Expense $151,000 To Accounts Payable $151,000 to record the advertising expense incurred g Manufacturing OH[$87000*80%] $69,600 Depreciation Expense $17,400 To Accumulated Depreciation $87,000 to record the depreciation expense on different activties h Manufacturing OH[$112000*85%] $95,200 Rent Expense $16,800 Overhead applied To Accounts Payable $112,000 Actual DLH *Predetermined OH rate To record the rent expense incurred 1100 *Estimated OH/Estimated DLH on different activties 1100*$380000/1000 $418,000 i Manufacturing OH $418,000 To WIP $418,000 to record the manufcaturing oh cost applied during the yr j Finished Goods $920,000 To WIP $920,000 to record the cost of goods manufactured k Accounts Receivable $1,950,000 To Sales $1,950,000 to record the sales on account during the yr Cost of Goods Sold $950,000 To Finished Goods $950,000 to record the cost of goods sold during the yr 2 Requirement Raw Materials To Beg Bala $45,000 BY WIP $260,000 To Accounts Payable $275,000 By End Bal $60,000 $320,000 $320,000 WIP To Beg Bal $36,000 By FG $920,000 To Raw Materials $260,000 By End Bal $99,000 To Salaries and wages Payable $305,000 To MOH $418,000 $1,019,000 $1,019,000 FG To Beg Bal $75,000 By Cogs $950,000 To WIP $920,000 By End Bal $45,000 $995,000 $995,000 MOH To Accounts Payable $70,300 By WIP $418,000 To Salaries and Wages payable $105,000 To Accounts Payable $69,000 To Accumulated Depreciation $69,600 To Accounts Payable $95,200 To End Bal $8,900 $418,000 Utilities To Accounts Payable $3,700 Salaries expenses To Salaries and wages payable $185,000 Advertising Exp To Acoounts payable $151,000 Depreciation Exp To Accumulated Depreciation $17,400 Rent Exp To Accounts Payable $16,800 Accounts Receivable To Sales $1,950,000 Sales By Accounts Receivable $1,950,000 COGS To FG $950,000 Accumulated Depreciation By MOH $69,600 By Depreciation Exp $17,400 3 Schedule of Cost of Goods Manufactured Direct Materials Raw Materials Beg Bal $45,000 Add Purchases $275,000 Raw Materials available for use $320,000 Less Raw Material end Bal $60,000 Raw material used in prod $260,000 Add Direct Labor $305,000 Add Manu OH applied $418,000 Total Manufacturing Cost $983,000 Add WIP Beg Bal $36,000 Total $1,019,000 Less WIP End $99,000 Cost of Goods Manufactured $920,000 4A MOH $8,900 To COGS $8,900 to record the closure of MOH to COGS 4B Schedule of Cost of Good Sold FG Beg Bal $75,000 Add Cost of Good Manufactured $920,000 Cost of Goods available for sale $995,000 Less FG End Bal $45,000 Unadjusted cost of Good Sold $950,000 Less Overapplied OH $8,900 Adjusted Cost of Goods Sold $941,100 5 Income Statement Sales $1,950,000 Less Adjusted Cost of Goods Sold $941,100 Gross Margin $1,008,900 Less Selling and admin exp Advertising Exp $151,000 Utitlities exp $3,700 Salaries exp $185,000 Depr Exp $17,400 Rent Exp $16,800 Net Operating income $635,000
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