BuiltbyHands Stores does customized, hand-made souvenirs, in which each batch of items is a job. The company has a highly labor intensive production process, so it allocates manufacturing overhead based on Direct labor hours. Pre-determined overhead application rate for 20X9 was computed from the following data: Total estimated factory overheads $2,400,000 Total estimated direct labor hours 40,000 At the end of May 20X9, BuiltbyHands Shops reported the following inventories: Materials Inventory WIP Inventory Finished Goods Inventory Bal. $208,000 Bal. $176,000 Bal. $95,000 During June 20X9, BuiltbyHands Stores actually used 3,000 direct labor hours and recorded the following transactions. () Purchased materials on account (ii) Manufacturing wages incurred Materials requisitioned (includes $30,000 of indirect materials) $310,000 $400,000 $420,000 (iii) (iv) Assigned manufacturing wages, 85% direct labor, 15% indirect labor $95,000 $35,000 (v) Depreciation expense on factory equipment used on the different jobs (v) Other manufacturing overhead incurred Allocated manufacturing overhead for June 20X8 Cost of jobs completed (vii) Cost of jobs sold (on account) at a margin of 33%% on sales (vi) $995,000 $960,000 (vii)
BuiltbyHands Stores does customized, hand-made souvenirs, in which each batch of items is a job. The company has a highly labor intensive production process, so it allocates manufacturing overhead based on Direct labor hours. Pre-determined overhead application rate for 20X9 was computed from the following data: Total estimated factory overheads $2,400,000 Total estimated direct labor hours 40,000 At the end of May 20X9, BuiltbyHands Shops reported the following inventories: Materials Inventory WIP Inventory Finished Goods Inventory Bal. $208,000 Bal. $176,000 Bal. $95,000 During June 20X9, BuiltbyHands Stores actually used 3,000 direct labor hours and recorded the following transactions. () Purchased materials on account (ii) Manufacturing wages incurred Materials requisitioned (includes $30,000 of indirect materials) $310,000 $400,000 $420,000 (iii) (iv) Assigned manufacturing wages, 85% direct labor, 15% indirect labor $95,000 $35,000 (v) Depreciation expense on factory equipment used on the different jobs (v) Other manufacturing overhead incurred Allocated manufacturing overhead for June 20X8 Cost of jobs completed (vii) Cost of jobs sold (on account) at a margin of 33%% on sales (vi) $995,000 $960,000 (vii)
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 10E: Ada Clothes Company produced 40,000 units during April. The Cutting Department used 12,800 direct...
Related questions
Question
Required:
(a) What is the balance in the Cost of Goods Sold account after the adjustment?
(b) Compute, BuiltbyHands Stores‘gross profit earned on the jobs completed.
(c) Open T-accounts for Materials Inventory, Work in Process Inventory and Finished Goods Inventory.
Transcribed Image Text:BuiltbyHands Stores does customized, hand-made souvenirs, in which each batch of items is a job. The
company has a highly labor intensive production process, so it allocates manufacturing overhead based on
Direct labor hours.
Pre-determined overhead application rate for 20X9 was computed from the following data:
Total estimated factory overheads $2,400,000
Total estimated direct labor hours
40,000
At the end of May 20x9, BuiltbyHands Shops reported the following inventories:
Materials Inventory
WIP Inventory
Finished Goods Inventory
Bal. $208,000
Bal. $176,000
$95,000
Bal.
During June 20X9, BuiltbyHands Stores actually used 3,000 direct labor hours and recorded the
following transactions.
Purchased materials on account
(i)
(ii)
(iii)
$310,000
$400,000
$420,000
Manufacturing wages incurred
Materials requisitioned (includes $30,000 of indirect materials)
(iv)
Assigned manufacturing wages, 85% direct labor, 15% indirect labor
$95,000
$35,000
(v)
Depreciation expense on factory equipment used on the different jobs
(v)
Other manufacturing overhead incurred
(vi)
Allocated manufacturing overhead for June 20X8
(vii)
(viii) Cost of jobs sold (on account) at a margin of 33%% on sales
$995,000
$960,000
Cost of jobs completed
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 5 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,