Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2408250 • Letter: S
Question
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
800
1. Assume the ending raw materials inventory is $2,600 and the company does not use any indirect materials. Prepare a schedule of cost of goods manufactured.
2. Prepare the journal entry to transfer costs from Work in Process to Finished Goods
3. Prepare a schedule of cost of goods sold.
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
Explanation / Answer
Computation of purchase of material: material used in production (15000+9600) 24600 Add: Ending Inventory 2,600 Material purchases 27200 Pre-determined OH rate : Fixed OH rate (14400/3600) 4 Variable OH rate 1.50 Total Oh rate per DLH 5.50 Schedule of Cost of Goods manufactured: Material purchases 27,200 Less: ending inventory 2,600 Material consumed 24600 Direct labour 52500 Oh applied (3500 DLH @5.50) 19250 Total cost of Goods manufactured 96350 Journal entry: Finished Goods inventory Account Dr. 96350 Work in process inventory Account 96350 Schedule of Cost of Goods sold: Beigning Inventory of FG 0 Add: cost of Goods manufactured 96350 Less: Ending inventory of FG 0 Unadjusted cost of goods sold 96350 Add: Underapplied OH 250 ($ 19500-19250) Cost of goods sold Adjusted 96600
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