Assume If Bags and Luggage assigns manufacturing overhead of $34,400, what will
ID: 2374656 • Letter: A
Question
Assume If Bags and Luggage assigns manufacturing overhead of $34,400, what will be the balances in the Direct Materials, Work in Process, and Finished Goods Inventory accounts at the end of January?(Input all amounts as positive values. Omit the "$" sign in your response.)
As of January 31, what will be the balance in the Manufacturing Overhead account? (Input all amounts as positive values. Omit the "$" sign in your response.)
What was Bags and Luggage's operating income for January? (Input all amounts as positive values.Omit the "$" sign in your response.)
The Bags and Luggage Company had the following account balances as of January 1:Explanation / Answer
a.
Direct materials inventory, Jan. 1
$8,700
Direct materials purchased
25,750
Less: Direct materials used in production
(26,000)
Direct materials inventory, Jan. 31
$8,450
Work in process inventory, Jan. 1
$76,500
Direct materials used
26,000
Direct labor used
42,000
Manufacturing overhead applied
32,400
Less: Finished goods transferred out
(69,000)
Work in process inventory, Jan. 31
$107,900
Finished goods inventory, Jan. 1
$53,000
Cost of finished goods transferred in
69,000
Less: Cost of goods sold
(89,000)
Finished goods inventory, Jan. 31
$33,000
b.
Manufacturing overhead, Jan. 1
$0
Indirect materials purchased
3,500
Supervisor salaries
12,000
Indirect labor costs
3,000
Depreciation
4,500
Factory utilities
7,800
Factory insurance
4,200
Property taxes on factory
3,000
Less: Manufacturing overhead applied
(32,400)
Manufacturing overhead, Jan. 31
$5,600
=============================
c.
Operating income for the month of January:
Revenues
$165,000
Cost of goods sold
(89,000)
Gross profit
76,000
Operating expenses:
Sales commissions
$16,500
Advertising expense
6,300
(22,800)
Operating income
$53,200
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