values 3.00 points Problem 7-52 Cost Flows through Accounts (LO 7-2, 3, 4) Brigh
ID: 2578780 • Letter: V
Question
values 3.00 points Problem 7-52 Cost Flows through Accounts (LO 7-2, 3, 4) Brighton Services repairs locomotive engines. It employs 100 full-time workers at $18 per hour. Despite operating at capacity, last year's performance was a great disappointment to the managers. In total, 10 jobs were accepted and completed, incurring the following total costs: Direct materials Direct labor Manufacturing overhead $1,043,400 5,040,000 1,260,000 of the $1,260,000 manufacturing overhead, 40 percent was variable overhead and 60 percent was fixed. This year, Brighton Services expects to operate at the same activity level as last year, and overhead costs and the wage rate are not expected to change. For the first quarter of this year, Brighton Services completed two jobs and was beginning the third (Job 103). The costs incurred follow: Direct Direct Labor Job 101 102 103 Total manufacturing overhead Total marketing and administrative costs Materials $ 138,000 $496,000 101,000 312,800 94,800 198,700 272,000 118,000 You are a consultant associated with Lodi Consultants, which Brighton Services has asked for help. Lodi's senior partner has examined Brighton Services's accounts and has decided to divide actual factory overhead by job into fixed and variable portions as follows: 101 102 103 Actual Manufacturing Overhead Variable Fixed $ 30,700 $ 104,800 28,300 89,000 5,400 13,800 $ 64,400 $ 207,600 In the first quarter of this year, 40 percent of marketing and administrative cost was variable and 60 percent was fixed. You are told that Jobs 101 and 102 were sold for $862,000 and $566,000, respectively. All over- or underapplied overhead for the quarter is written off to Cost of Goods Sold. Required: a. Present in T-accounts the actual manufacturing cost flows for the three jobs in the first quarter of this year.Explanation / Answer
INCOME STATEMENT
TOTAL
JOB 001 $
JOB 002 $
SALES
862000
566000
1428000
COST OF SALES
-769500
-531100
-1300600
GROSS PROFIT
92500
34900
127400
UNDER ABSORBED
OVERHEADS
18200
MARKETING/ ADMIN EXPENSES
118000
NET LOSS
8800
PRODUCTION OVERHEADS
$
$
CASH
272000
JOB 001
28300
89000
JOB 002
28300
89000
JOB 003
5400
13800
TRF TO INCOME STATEMENT
18200
272000
272000
JOB 003
$
$
DM
94800
TRF TO WIP
312700
DL
198700
FOH VARIABLE
5400
FIXED
13800
312700
312700
JOB 002
$
$
DM
101000
TRF TO FG
531100
DL
312800
FOH VARIABLE
28300
FIXED
89000
531100
531100
JOB 003
$
$
DM
94800
TRF TO WIP
312700
DL
198700
FOH VARIABLE
5400
FIXED
13800
312700
312700
INCOME STATEMENT
TOTAL
JOB 001 $
JOB 002 $
SALES
862000
566000
1428000
COST OF SALES
-769500
-531100
-1300600
GROSS PROFIT
92500
34900
127400
UNDER ABSORBED
OVERHEADS
18200
MARKETING/ ADMIN EXPENSES
118000
NET LOSS
8800
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.