Donnell Transport assembles prestige mobile homes. Manufacturing overhead is all
ID: 2539058 • Letter: D
Question
Donnell Transport assembles prestige mobile homes. Manufacturing overhead is allocated at a rate of $3 per machine hours. The following information is available: Raw materials 1/1/13 Work in process 1/1/13 Finished goods 1/1/13 Direct materials used Depreciation on plant Utilities on the factory Sales Raw materials 12/31/13 Salesperson salary Manufacturing overhead allocated, 21 actual machine hours $12 2 6 145 19 Materials & supplies purchased Direct labor President's salary Supplies used Indirect factory labor used Utilities on showroom floor Finished goods 12/31/13 Work in process 12/31/13 Propertytaxes, administration bldg-4 $150 90 36 10 30 29 $400 17 25 REQUIRED: Prepare the journal entries for the above information (15 journal entries). Show the journal entry to close the over-or-under applied overhead to cost of goods control Prepare a cost of goods manufactured statement in good form Prepare a cost of goods sold statement in good form. Prepare an income statement in good formExplanation / Answer
Answer 1.
Journal Entry
Date Particulars Dr. Amt. Cr. Amt.
1 Raw Material 150.00
Accounts Payable 150.00
(Record the Inventory purchased)
2 Work in Process 145.00
Manufacturing Overhead 10.00
Raw Material 155.00
(record the material issued for production)
3 Work in Process 90.00
Manufacturing Overhead 30.00
Wages & Salary Payable 120.00
(record the direct & indirect labor)
4 Manufacturing Overhead 28.00
Accumulated Depreciation - Plant 19.00
Utilities Expenses 9.00
(record the manufcaturing overhead)
5 Salary & Wages Expenses - Sales 25.00
Salary & Wages Expenses - Admn. 36.00
Wages & Salary Payable 61.00
(record the selling & administrative salaries)
6 Utilities Expenses 29.00
Utilities Payable 29.00
(record the utilities expenses)
7 Property Taxes - Admn. 4.00
Property Taxes Payable / Cash 4.00
(record the property expenses)
8 Work in Process
Manufacturing Overhead 63.00
(record the manufacturing overhead applied) 63.00
9 Finished Goods Inventory 283.00
Work in Process 283.00
(record the finished gooods inventory manufactured)
10 Accounts Receivable / Cash 400.00
Sales 400.00
(record the sales made)
11 Cost of Goods Sold 281.00
Finished Goods Inventory 281.00
(record the cost of goods sold)
12 Cost of Goods Sold 5.00
Manufacturing Overhead 5.00
(record the underapplied overhead)
Raw Material Work in Process
Beg. Bal. 12.00 155.00 2 Beg. Bal. 2.00 283.00 9
1 150.00 2 145.00
3 90.00
8 63.00
End. Bal. 7.00 End. Bal. 17.00
Manufacturing Overhead Finished Goods
2 10.00 63.00 8 Beg. Bal. 6.00 281.00 11
3 30.00 5.00 12 9 283.00
4 28.00 (Underapplied)
End. Bal. - End. Bal. 8.00
Statement of Cost of Goods Manufactured
Direct Material 145.00
Direct Labor 90.00
Manufacturing Overhead Applied - 21 Mach Hrs X $3 63.00
Total Manufacturing Overhead 298.00
WIP Inventory, 1/1/13 2.00
WIP Inventory, Dec 31 (17.00)
Cost of Goods Manufactured 283.00
Statement of Cost of Goods Sold
Finished Goods Inventory, 1/1/13 6.00
Cost of Goods Manufactured 283.00
Cost of Goods Available for Sale 289.00
Finished Goods Inventory, Dec 31 (8.00)
Unadjusted Cost of Goods Sold 281.00
Underapplied Overhead 5.00
Adjusted Cost of Goods Sold 286.00
Income Statement
Sales 400.00
Adjusted Cost of Goods Sold 286.00
Gross Margin 114.00
Selling & Admn. Expenses
Salesperson Salary 25.00
President Salary 36.00
Utilities -Showroom 29.00
Property Taxes - Admn 4.00
Total Selling & Admn. Exp. 94.00
Net Operating Income 20.00
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