Hle Et Viéw HistoryBookmarks ToolsWindow Help 87% Thu 12:47 AM Connect Chegg Stu

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Hle Et Viéw HistoryBookmarks ToolsWindow Help 87% Thu 12:47 AM Connect Chegg Study Guided ?? We Can't Open This F weston Products Ma, ? https://newconnect.mheducation.com/flow/connect.html .HQ Search Chapter 2 and 28 6 Help Save & Exit Subr Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 7 Beginning inventories Ending inventories Direct materialas Direct labor Manufacturing overhead incurred Selling and administrative expense Actual hours of bandsaw use 5,380 8,860 $14,270 s 8,230 159 10 points Required: 1-a. Prepare an income statement that records the cost of unused capacity on the income statement as a period expense. 1-b. How much of the cost of unused capacity can be shown on the income statement as a period expense? Answer is complete but not entirely correct. Complete this question by entering your answers in the table below. Required 1A Required 1B Prepare an income statement that records the cost of unused capacity on the income statement as a period expense.

Explanation / Answer

Part 1A)

Step 1: Calculate Cost of Goods Sold

The cost of goods sold is calculated with the use of following table:

_____

Step 2: Prepare Income Statement

The income statement is prepared as follows:

_____

Part 1B)

The cost of unused capacity that can be shown on the income statement as period expense is determined as below:

Cost of Unused Capacity = (Maximum Capacity Per Month - Actual Capacity Used During Month)*Predetermined Overhead Rate = (189 - 159)*84 = $2,520

Direct Materials 5,380 Direct Labor 8,860 Manufacturing Overhead Applied (159*84) 13,356 Total Manufacturing Costs Charged to Jobs 27,596 Add Opening Work in Process Inventory 0 Less Closing Work in Process Inventory 0 Cost of Goods Manufactured 27,596 Add Opening Finished Goods Inventory 0 Goods Available for Sale 27,596 Less Closing Finished Goods Inventory 0 Cost of Goods Sold $27,596

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