Selected information from the Blake Corporation accounting records for June foll

Question

Selected information from the Blake Corporation accounting records for June follows:

these are t charts

Manufacturing Overhead Control

Additional information for June follows:

Labor wage rate was $30 per hour.

During the month, sales revenue was $1,037,000, and selling and administrative costs were $240,000.

This company has no indirect materials or supplies.

The company applies manufacturing overhead on the basis of direct labor-hours.

Required:

a. What was the cost of direct materials purchased in June?

b. What was the over- or underapplied manufacturing overhead for June?

c. What was the manufacturing overhead application rate in June?

d. What was the cost of products completed during June?

e. What was the balance of the Work-in-Process Inventory account at the beginning of June?

f. What was the operating profit (or loss) for June? (Negative amounts should be indicated by a minus sign.)

Materials Inventory BB (6/1) 93,000 465,000 420,000 Work-In-Process Inventory Labor 570,000 EB(6/30) 580,000 Finished Goods Inventory BB (6/1) 295,000 840,000 837,000 Cost of Goods Sold 28,000

Manufacturing Overhead Control

257,000 257,000 Applied Manufacturing Overhead 285,000 257,000 28,000

Explanation / Answer

T - Accounts:

a. material purchased $465000

b. over-applied overhead $28000

c. Manufacturing overhead application rate = 285000 / (570000/30) = 285000/19000 = $15 per DLH

d. cost of product completed during June $840000

e. Beginning balance of WIP Inventory account $145000

f. Operating Loss for June $12000

Material Inventory 6/1 93000 wip 420000 Purchases 465000 6/30 138000 WIP Inventory 6/1 145000 finished goods inven 840000 material inve 420000 6/30 580000 Labor 570000 Applied overhead 285000 Finished Goods Inven 6/1 295000 COGS 837000 wip 840000 6/30 298000 COGS finished goods inven 837000 Applied M overhead 28000 Income statement 809000 Manuf overhead control 257000 257000 Applied Manuf. Overhead Manuf overhead control 257000 wip 285000 COGS 28000 Income Statement COGS 809000 Sales 1037000 selling & admin. expenses 240000 Operating Loss 12000

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