Concept explainers
Analyzing
Summer Boards Company manufactures surf boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for May:
In addition, the following information is available:
- Materials and direct labor were applied to six jobs in May:
b.Factory
c.The May 1 Work in Process balance consisted of two jobs, as follows:
d. Customer jobs completed and units sold in May were as follows:
Instructions
Determine the May 31 balances for each of the inventory accounts and factory overhead.
Concept introduction:
Direct Cost:
The cost which is directly related to the product and affects those items directly which contribute to the revenue generation in the business is referred as direct cost.It makes a direct relation to the manufacturing cost.
Indirect Cost:
The cost which is not directly related to the product and does not affect those items directly which contribute to the revenue generation in the business is referred as indirect cost. These can be fixed costs or such costs that are incurred as a whole and cannot be related to manufacturing cost.
The balances at
Answer to Problem 10.4.2P
The closing balances on
Explanation of Solution
The balance of material accounton
Date | Particulars | Amount | Date | Particulars | Amount |
Opening balance | Requisitions | ||||
Purchases | |||||
Closing balance | |||||
Total | Total |
The balance of work in process accounton
Date | Particulars | Amount | Date | Particulars | Amount |
Opening balance | Finished goods | ||||
Direct material | |||||
Direct Labor | |||||
Factory overhead | Closing balance | ||||
Completed jobs | |||||
Total | Total |
The balance of finished goods accounton
Date | Particulars | Amount | Date | Particulars | Amount |
Opening balance | Cost of goods sold | ||||
Total cost of finished goods | Closing balance | ||||
Work in process | |||||
Total | Total |
The balance of factory overhead accounton
Date | Particulars | Amount | Date | Particulars | Amount |
Opening balance | |||||
Wages payable | Factory overhead applied | ||||
Indirect material | Overhead under applied transfer to COGS | ||||
Other overhead | |||||
Total | Total |
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Chapter 10 Solutions
Survey of Accounting (Accounting I)
- Kokomo Kayak Inc. uses the process cost system. The following data, taken from the organizations books, reflect the results of manufacturing operations during the month of March: Production Costs Work in process, beginning of period: Costs incurred during month: Production Data: 18,000 units finished and transferred to stockroom. Work in process, end of period, 3,000 units, two-thirds completed. Required: Prepare a cost of production summary for March.arrow_forwardDublin Brewing Co. uses the process cost system. The following data, taken from the organizations books, reflect the results of manufacturing operations during October: Production Costs Work in process, beginning of period: Costs incurred during month: Production Data: 13,000 units finished and transferred to stockroom Work in process, end of period, 2,000 units one-half completed Required: Prepare a cost of production summary for October.arrow_forwardLeMans Company produces specialty papers at its Fox Run plant. At the beginning of June, the following information was supplied by its accountant: During June, direct labor cost was 143,000, direct materials purchases were 346,000, and the total overhead cost was 375,800. The inventories at the end of June were: Required: 1. Prepare a cost of goods manufactured statement for June. 2. Prepare a cost of goods sold schedule for June.arrow_forward
- The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?arrow_forwardCost of Direct Materials, Cost of Goods Manufactured, Cost of Goods Sold Bisby Company manufactures fishing rods. At the beginning of July, the following information was supplied by its accountant: During July, the direct labor cost was 43,500, raw materials purchases were 64,000, and the total overhead cost was 108,750. The inventories at the end of July were: Required: 1. What is the cost of the direct materials used in production during July? 2. What is the cost of goods manufactured for July? 3. What is the cost of goods sold for July?arrow_forwardAnalyzing manufacturing cost accounts Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May: In addition, the following information is available: A. Materials and direct labor were applied to six jobs in May: B. Factory overhead is applied to each job at a rate of 50% of direct labor cost. C. The May 1 Work in Process balance consisted of two jobs, as follows: D. Customer jobs completed and units sold in May were as follows: Instructions 1. Determine the missing amounts associated with each letter. Provide supporting computations by completing a table with the following headings: 2. Determine the May 31 balances for each of the inventory accounts and factory overhead.arrow_forward
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