ACCT2102 SP21 Comprehensive Problem 1<\/p>\n
Answer all questions and Label all work as required<\/p>\n
Part 1.<\/p>\n
Rhiner Corporation is a manufacturer that uses job-order costing. On January 1, the company\u2019s inventory balances were as follows:<\/p>\n
Raw materials$42,000<\/p>\n
Work in process$20,000<\/p>\n
Finished goods$36,000<\/p>\n
The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company\u2019s predetermined overhead rate of $16.50 per direct labor-hour was based on a cost formula that estimated $660,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:<\/p>\n
Raw materials were purchased on account, $520,000.<\/p>\n
Raw materials used in production, $465,000. All of the raw materials were used as direct materials.<\/p>\n
The following costs were accrued for employee services: direct labor, $605,000; indirect labor, $150,000; selling and administrative salaries, $240,000.<\/p>\n
Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $357,000.<\/p>\n
Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $505,000.<\/p>\n
Manufacturing overhead cost was applied to production. The company actually worked 42,000 direct labor-hours on all jobs during the year.<\/p>\n
Jobs costing $1,685,000 to manufacture according to their job cost sheets were completed during the year.<\/p>\n
Jobs were sold on account to customers during the year for a total of $2,750,000. The jobs cost $1,695,000 to manufacture according to their job cost sheets.<\/p>\n
Required (Show all work\/Calculations!)<\/p>\n
What is the journal entry to record the purchase of raw materials?<\/p>\n
General Journal Debit($) Credit($)<\/p>\n
Work in progress 465000<\/p>\n
Raw Materials 465000<\/p>\n
(To record the raw materials used in production)<\/p>\n
What is the ending balance in Raw Materials? (Show T-Account)<\/p>\n
Raw Materials:<\/p>\n
Beginning Balance $42000<\/p>\n
Add: $520000<\/p>\n
Less: Raw materials used in production $-465000<\/p>\n
Ending Balance $97000<\/p>\n
What is the journal entry to record the labor costs incurred during the year?<\/p>\n
General Journal Debit($) Credit($)<\/p>\n
Salaries and administrative salaries $240,000<\/p>\n
Manufacturing overhead $150,000<\/p>\n
Work in progress $605000<\/p>\n
Wages payable $995000<\/p>\n
(To record the labor cost incurred)<\/p>\n
What is the total amount of manufacturing overhead applied to production during the year? (Show complete calculations)<\/p>\n
Manufacturing overhead applied=16.50*42000hours= $693000<\/p>\n
What is the total manufacturing cost added to Work in Process during the year?<\/p>\n
Raw Materials $ 465000<\/p>\n
Direct Labour $605000<\/p>\n
Manufacturing overhead $693000<\/p>\n
Cost added to work in progress $1763000<\/p>\n
What is the journal entry to record the transfer of completed jobs that is referred to above?<\/p>\n
General Journal Debit($) Credit($)<\/p>\n
Finished Goods 1685000<\/p>\n
Work in progress 1685000<\/p>\n
(To record the transfer of completed jobs)<\/p>\n
What is the ending balance in Work in Process?<\/p>\n
Beg. Balance $20,000<\/p>\n
Raw materials used in production $465,000<\/p>\n
Direct labor $605,000<\/p>\n
Manufacturing overhead applied $693000 $1685000 Cost of goods sold <\/p>\n
End Balance $98000<\/p>\n
What is the total amount of actual manufacturing overhead cost incurred during the year? (Show T-Account)Beg. Bal. 0<\/p>\n
Indirect labor $150,000<\/p>\n
Depreciation,insurance,utilities $505,000<\/p>\n
End Bal. $655000<\/p>\n
Is manufacturing overhead underapplied or overapplied for the year? By how much?<\/p>\n
Overapplied. The applied overhead is more than the actual.<\/p>\n
$693000-$655000=$38000<\/p>\n
What is the cost of goods available for sale during the year? (Show complete calculations)<\/p>\n
Cost of goods available for sale $1721000<\/p>\n
Beg. Balance $36,000<\/p>\n
Cost of good manufactured $1685000<\/p>\n
What is the journal entry to record the cost of goods sold referred to above?<\/p>\n
General journal Debit($) Credit($)<\/p>\n
Cost of goods sold $1,695,000<\/p>\n
Finished goods $1,695,000<\/p>\n
What is the ending balance in Finished Goods? (Show T-Account)<\/p>\n
Beg. Balance $36000<\/p>\n
Manufacturing overhead $1685000 $1695000<\/p>\n
End Bal $26000<\/p>\n
Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?<\/p>\n
Cost of goods sold $1695000<\/p>\n
Less: manufacturing overhead $38000<\/p>\n
Adjusted cost of goods sold $1657000<\/p>\n
What is the gross margin for the year?<\/p>\n
Sale $2,750,000<\/p>\n
Less:COGS $1657000<\/p>\n
Gross profit $1093000<\/p>\n
What is the net operating income for the year?<\/p>\n
Gross Profit $1093000<\/p>\n
Less:Selling and adm salaries $240,000<\/p>\n
Expenses $357,000 <\/p>\n
Net profit $496000 <\/p>\n
It is recommended that you work through all journal entries, t-accounts and schedules\/statements to correctly formulate your answers. <\/p>\n","protected":false},"excerpt":{"rendered":"
ACCT2102 SP21 Comprehensive Problem 1 Answer all questions and Label all work as required Part 1. Rhiner Corporation is a<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-53126","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\n