Balance Sheet and Direct Labor

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Problem 1-7A (75 minutes)
Part 1

DE LEON COMPANY
Manufacturing Statement
For Year Ended December 31, 2013
Direct materials

Raw materials inventory, December 31, 2012
$ 166,850

Raw materials purchases 925,000

Raw materials available for use
1,091,850

Less raw materials inventory, December 31, 2013 182,000

Direct materials used

$ 909,850
Direct labor

675,480
Factory overhead

Depreciation expense—Factory equipment
33,550

Factory supervision
102,600

Factory supplies used
7,350

Factory utilities
33,000

Indirect labor
56,875

Miscellaneous production costs
8,425

Rent expense—Factory building
76,800

Maintenance
…show more content…
Note that the company carries fewer days’ supply (25.3 days) in its finished goods inventory.

Problem 2-4B (35 minutes)

Part 1

a. Predetermined overhead rate

= = = 50%

b. Overhead costs charged to jobs

Direct
Applied
Job No.
Labor
Overhead (50%)
625
$ 354,000
$177,000
626
330,000
165,000
627
175,000
87,500
628
420,000
210,000
629
184,000
92,000
630 10,000 5,000
Total
$1,473,000
$736,500

c. Overapplied or underapplied overhead determination

Actual overhead cost
$725,000
Less applied overhead cost 736,500
Overapplied overhead
$ (11,500)

Part 2

Dec. 31
Factory Overhead
11,500

Cost of Goods Sold

11,500

To assign overapplied overhead.

Problem 3-1A (45 minutes)
Part 1: Cost of goods transferred and cost of goods sold
Beginning goods in process inventory
$ 435,000
Direct materials used in production
157,500
Direct labor used in production
780,000
Overhead applied (115% of direct labor cost) 897,000 Total production costs
2,269,500
Less ending goods in process inventory (515,000)
Transferred to finished goods inventory (a)
$1,754,500
Beginning finished goods inventory
$ 633,000
Plus goods transferred from production 1,754,500
Goods available for sale 2,387,500
Less ending finished

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