1) The Collins Corporation uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of materials used in production. At the beginning of the most recent year, the following estimates were made as a basis for computing the predetermined overhead rate for the year: manufacturing overhead cost, $200,000; direct materials cost, $160,000. The following transactions took place during the year (all purchases and services were acquired on account): a. Raw materials were purchased, $86,000. b. Raw materials were requisitioned for use in production (all direct materials), $98,000. c. Utility costs were incurred in the factory, $15,000. d. Salaries and wages were incurred as follows: Direct labor Indirect labor Selling and administrative salaries $175,000 $70,000 $125,000 e. Maintenance costs incurred in the factory, $15,000. f. Advertising costs incurred, $89,000. g. Depreciation recorded for the year, $80,000 (80% relates to factory assets and the remainder relates to selling, general, and administrative assets). h. Rental cost incurred on buildings, $70,000, (75% of the space is occupied by the factory, and 25% is occupied by sales and administration). i. Miscellaneous selling, general, and administrative costs incurred, $11,000. j. Manufacturing overhead cost was applied to jobs as per company policy. k. Cost of goods manufactured for the year, $500,000. 1. Sales for the year totaled $1,000,000. These goods cost $600,000 to produce. Required: Prepare journal entries for each of the above transactions. Assume that all transactions with external suppliers, employees, and customers were conducted in cash. Prepare an Income Statement in good format.
1) The Collins Corporation uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of materials used in production. At the beginning of the most recent year, the following estimates were made as a basis for computing the predetermined overhead rate for the year: manufacturing overhead cost, $200,000; direct materials cost, $160,000. The following transactions took place during the year (all purchases and services were acquired on account): a. Raw materials were purchased, $86,000. b. Raw materials were requisitioned for use in production (all direct materials), $98,000. c. Utility costs were incurred in the factory, $15,000. d. Salaries and wages were incurred as follows: Direct labor Indirect labor Selling and administrative salaries $175,000 $70,000 $125,000 e. Maintenance costs incurred in the factory, $15,000. f. Advertising costs incurred, $89,000. g. Depreciation recorded for the year, $80,000 (80% relates to factory assets and the remainder relates to selling, general, and administrative assets). h. Rental cost incurred on buildings, $70,000, (75% of the space is occupied by the factory, and 25% is occupied by sales and administration). i. Miscellaneous selling, general, and administrative costs incurred, $11,000. j. Manufacturing overhead cost was applied to jobs as per company policy. k. Cost of goods manufactured for the year, $500,000. 1. Sales for the year totaled $1,000,000. These goods cost $600,000 to produce. Required: Prepare journal entries for each of the above transactions. Assume that all transactions with external suppliers, employees, and customers were conducted in cash. Prepare an Income Statement in good format.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter2: Accounting For Materials
Section: Chapter Questions
Problem 15E: Kenkel, Ltd. uses backflush costing to account for its manufacturing costs. The trigger points are...
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
do not give solution in image format and fast answer please
Transcribed Image Text:1) The Collins Corporation uses a job-order costing system and applies manufacturing
overhead cost to jobs on the basis of the cost of materials used in production. At the beginning
of the most recent year, the following estimates were made as a basis for computing the
predetermined overhead rate for the year: manufacturing overhead cost, $200,000; direct
materials cost, $160,000. The following transactions took place during the year (all purchases
and services were acquired on account):
a. Raw materials were purchased, $86,000.
b. Raw materials were requisitioned for use in production (all direct materials), $98,000.
c. Utility costs were incurred in the factory, $15,000.
d. Salaries and wages were incurred as follows:
Direct labor
Indirect labor
Selling and administrative
salaries
$175,000
$70,000
$125,000
e. Maintenance costs incurred in the factory, $15,000.
f. Advertising costs incurred, $89,000.
g. Depreciation recorded for the year, $80,000 (80% relates to factory assets and the remainder
relates to selling, general, and administrative assets).
h. Rental cost incurred on buildings, $70,000, (75% of the space is occupied by the factory, and
25% is occupied by sales and administration).
i. Miscellaneous selling, general, and administrative costs incurred, $11,000.
j. Manufacturing overhead cost was applied to jobs as per company policy.
k. Cost of goods manufactured for the year, $500,000.
1. Sales for the year totaled $1,000,000. These goods cost $600,000 to produce.
Required:
Prepare journal entries for each of the above transactions. Assume that all transactions with
external suppliers, employees, and customers were conducted in cash. Prepare an Income
Statement in good format.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
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
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,