Saved Help Save & Exit Submit Check my work Froya Fabrikker A/S of Bergen, Norwa

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Saved Help Save & Exit Submit Check my work Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing sys of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $351,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year tem that applies manufacturing overhead cost to jobs on the basis a. Raw materials purchased on account, $265,000. b. Raw materials used in production (all direct materials), $250,000 C. Utility bills incurred on account, $72.000 (85% related to factory operations, and the remainder related to selling and administrative activities) d. Accrued salary and wage costs: Direct labor (988 hours) Indirect labor $295,00e $103,80e $175,00e Selling and administrative salaries

Explanation / Answer

Accounting titles & Explanations Debit Credit a) Raw materials inventory 265,000 Accounts payable 265,000 b) work in process inventory 250,000 Raw materials inventory 250,000 c) manufacturing overhead 61200 utility expense 10800 Accounts payable 72,000 d) work in process inventory 295,000 Manufacturing overhead 103,000 Salary expense 175,000 Salary & wages payable 573,000 e) Manufacturing overhead 67,000 Accounts payable 67,000 f) Advertising expense 149,000 Accounts payable 149,000 g) Manufacturing overhead 59500 Depreciation expense 25500 Accumulated depreciation 85,000 h) Manufacturing overhead 82500 Rent expense 27500 Accounts payable 110,000 i) Work in process inventory 382,200 Manufacturing overhead 382,200 j) finished goods inventory 900,000 Work in process inventory 900,000 k) Accounts receivable 1,850,000 sales 1,850,000 cost of goods sold 930,000 finished goods inventory 930,000

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