Data P3-3: FROYA FABRIKKER A/S Beginning estimates: The company uses a job-order

Question

Data P3-3: FROYA FABRIKKER A/S Beginning estimates: The company uses a job-order costing Manufacturing overhead cost $360,000 system and applies overhead cost to Direct labor hours 900 jobs on the basis of direct labor-hours. Transactions: Raw materials purchased $200,000 Raw materials requisitioned $185,000 Utility bills $70,000     For factory operations 90%     For sales and administrative activities 10% Costs for salaries and wages: Direct labor (975 hours) $230,000 Indirect labor $90,000 Selling and admin salaries $110,000 Maintenance costs $54,000 Advertising costs $136,000 Depreciation $95,000     For factory equipment 80%     For sales and administrative equipment 20% Rental costs $120,000     Space for factory operations 85%     Space for sales & administration 15% Manufacturing overhead cost applied     to jobs ? Cost of goods manufactured $770,000 Sales on account $1,200,000 Cost of goods sold $800,000 According to job cost sheets. Inventory balances: Raw materials $30,000 Work in process $21,000 Finished goods $60,000 Job 412: Direct Materials $8,000 Direct labor hours 39 Total direct labor cost $9,200 Units 4 % billed above cost 60% Required: 1. Prepare journal entries to record the preceding data (transactions). 2. Post your entries to T-accounts. Determine the ending balances in the     inventory accounts and in the Manufacturing Overhead account. 3. Prepare a schedule of cost of goods manufactured. 4. Prepare a journal entry to close any balance in the Manufacturing Overhead     account to cost of goods sold. 5. Prepare an income statement for the year. 6. Job 412 was one of the many jobs started and completed during the year.     The job required $8,000 indirect materials and 39 hours of direct labor time at     a total cost of $9,200. The job contained only four units. If the company bills at     a price 60% above the unit product cost on the job cost sheet, what price per unit     would have been charged to the customer? Data P3-3: FROYA FABRIKKER A/S Beginning estimates: The company uses a job-order costing Manufacturing overhead cost $360,000 system and applies overhead cost to Direct labor hours 900 jobs on the basis of direct labor-hours. Transactions: Raw materials purchased $200,000 Raw materials requisitioned $185,000 Utility bills $70,000     For factory operations 90%     For sales and administrative activities 10% Costs for salaries and wages: Direct labor (975 hours) $230,000 Indirect labor $90,000 Selling and admin salaries $110,000 Maintenance costs $54,000 Advertising costs $136,000 Depreciation $95,000     For factory equipment 80%     For sales and administrative equipment 20% Rental costs $120,000     Space for factory operations 85%     Space for sales & administration 15% Manufacturing overhead cost applied     to jobs ? Cost of goods manufactured $770,000 Sales on account $1,200,000 Cost of goods sold $800,000 According to job cost sheets. Inventory balances: Raw materials $30,000 Work in process $21,000 Finished goods $60,000 Job 412: Direct Materials $8,000 Direct labor hours 39 Total direct labor cost $9,200 Units 4 % billed above cost 60% Required: 1. Prepare journal entries to record the preceding data (transactions). 2. Post your entries to T-accounts. Determine the ending balances in the     inventory accounts and in the Manufacturing Overhead account. 3. Prepare a schedule of cost of goods manufactured. 4. Prepare a journal entry to close any balance in the Manufacturing Overhead     account to cost of goods sold. 5. Prepare an income statement for the year. 6. Job 412 was one of the many jobs started and completed during the year.     The job required $8,000 indirect materials and 39 hours of direct labor time at     a total cost of $9,200. The job contained only four units. If the company bills at     a price 60% above the unit product cost on the job cost sheet, what price per unit     would have been charged to the customer?

Explanation / Answer

Ans 3

Accouts Title Dr Cr Raw Material $200,000 Accounts Payable or cash 200000 Work in progress 185000 Raw material 185000 Utility Expenses 70000 cash 70000 Labour expenses 230000 Salaries & Wages- manufacturibg Overhead Expenses 90000 Salaries & Wages Expenses 110000 Cash 430000 Maintainence Expenses 54000 Advertising Expenses 136000 Rent expenses 120000 Cash 310000 Accounts receivable 1200000 Sales 1200000

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