80.2K

Verified Solution

Link Copied!

Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs Inventory balances et the beginning of 2016 tollow: Rew Materials Inventory Work in Process Inventory $15,400 5.300 20 200 Finished Goods Inventory The following transacions occurred during January (a) Purchased materials on account for $26.600 b) Issued materials to production totaling $20,900, 90 percent of which was traced to specific jobs and the remander af which was treated as indirect materiais (c) Payrol costs totaling $16,100 were recorded as tolows: $10,900 for assembly workers 2,000 for tactory supervision 1,400 for ndministrative personnel 1,800 for sales commissions (d) Recorded depreciation: $5,700 tor machines, $600 for the copier used in the administrative oice (e) Reoorded $1,900 of expired insurance. Forty percent was insurance on the manufacturing faciity, with the remainder classifed as an administrative expense Paid $5,400 in other taciory oosts in cash (g) Appled manufactaring overhead at a rate of 200 percent of direct labor cost h) Compieted al jobs but one: the job oost sheet for this job shows $2.500 for direct materials $2,200 for arect labor. and $4,400 for applied overhead Sold jobs costing $50,300. The revenue earned on these jobs was $65,390 Required: 1. Set up T-accounts. record the beginnng balances, post the Janary tenactonsard enore the tnu balance or the Olow ng aoorts Poet-s amounta separley. Do not combineidd arvy dollar amount, when posting 0 the haccourt.) a. Raw Materials Inventory b. Work in Process trventory c. Finished Goods inventory d. Cost of Goods Sols e. Selling, General and Adeinistrative Expertes Sales Revenue g. Other accounts (Cash, Payobles etc Work in Process Inventory Beg. Bal Beg Bal End. Ba End. Bal Finished Goods Inventory Cost of Goods Sold Beg. Bai Beg. Bal End. Bal End. Bal Manufacturing Overhead General, and Administrative Expenses Beg. Bal. Beg. Bal End Ball End. Bai. End. Bal. Other Accounts Beg. Bal (Cash, Payables, etc Beg. Bal End. Bal. End. Bal. djusted Gross Proft 3. Determine the amount of over-or underapplied overhead. 2. Determine how much gross profithe company would report during the month of January before any adjustment is made for he overhead balance Gross Prof 3. Determine the amount of over- or underapplied overhead Overhead 4. Compute adjusted gross proft assuming that any over- or underapplied overhead balance is adjusted directly to o Cost of Goods Sold Gross Profit

Answer & Explanation Solved by verified expert

See Answer