Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2419435 • 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):
500
9. Prepare the journal entry to transfer costs from Work in Process to Finished Goods.
10. Prepare a completed Work in Process T-account including the beginning and ending balances and all debits and credits posted to the account.
11. Prepare a schedule of cost of goods sold.
12. Prepare the journal entry to transfer costs from Finished Goods to Cost of Goods Sold
13. What is the amount of underapplied or overapplied overhead?
14. Prepare the journal entry to close the amount of underapplied or overapplied overhead to Cost of Goods Sold
15 Assume that Job P includes 30 units that each sell for $2,800 and that the company’s selling and administrative expenses in March were $10,500. Prepare an absorption costing income statement for March
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
Sweeten Company Details Amt $ Predetermined Fixed Manufacturing OH 15,000 Estimated Total Direct Labor hrs 3,000 Predetermined Fixed Manufacturing OH per DLH 5 Predetermined variable Manufacturing OH per DLH 2 Total Manufacturing OH per DLH 7 Job Cost Details March Details Job P$ Job Q $ Total Direct Material 19,500 9,000 28,500 Direct Labor 31,500 7,500 39,000 Direct Labor Hrs Actual 2,100 500 2,600 Manufacturing OH Applied @$7/DLH 14,700 3,500 18,200 Total Manufacturing Cost 65,700 20,000 85,700 9 Journal Entry Dr $ Cr $ Work In Process 65,700 Finished Goods 65,700 10 T Account WIP Details Amt $ Details Amt $ To Direct Materials 28,500 By Finished Goods 65,700 To Direct Labor 39,000 By Balance b/d 20,000 To Manufacturing OH applied 18,200 To Balance c/f 20,000 11 Cost Of Goods sold Schedule details Amt $ Opening Stock Finished goods - Add :Cost Of Goods Manufactured 65,700 Less : Closing stock Finished goods - Cost of Goods sold 65,700 12 Journal Entry Dr $ Cr $ Cost of Goods sold 65,700 Finished Goods Inventory 65,700 13 Overhead Incurred during month 19,000 Overhead applied during Month 18,200 Overhead Underapplied 800 14 Journal Entry Dr $ Cr $ Cost of Goods sold 800 Manufacturing Overhead control a/c 800 15 Absorption costing Income statement with overhead adjustment For the month March Details Amt $ Sales Revenue(30 units @2800) 84,000 Opening Stock - Cost Of Production 85,700 Less : Closing Stock (20,000) Add: Underappled OH adjustment 800 Total Production cost 66,500 Gross Profit 17,500 Selling & Admin cost 10,500 Net Operating Income 7,000
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