inancial Statements of a Manufacturing Firm The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: • Purchased $185,100 of materials. • Used $159,200 of direct materials in production. • Incurred $136,000 of direct labor wages. • Applied factory overhead at a rate of 75% of direct labor cost. • Transferred $381,300 of work in process to finished goods. • Sold goods with a cost of $364,600.
inancial Statements of a Manufacturing Firm The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: • Purchased $185,100 of materials. • Used $159,200 of direct materials in production. • Incurred $136,000 of direct labor wages. • Applied factory overhead at a rate of 75% of direct labor cost. • Transferred $381,300 of work in process to finished goods. • Sold goods with a cost of $364,600.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter2: Job Order Costing
Section: Chapter Questions
Problem 14E: The following events took place for Rushmore Biking Inc. during February, the first month of...
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inancial Statements of a Manufacturing Firm
The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:
| • | Purchased $185,100 of materials. |
| • | Used $159,200 of direct materials in production. |
| • | Incurred $136,000 of direct labor wages. |
| • | Applied factory overhead at a rate of 75% of direct labor cost. |
| • | Transferred $381,300 of work in process to finished goods. |
| • | Sold goods with a cost of $364,600. |
| • | Revenues earned by selling bikes, $652,600. |
| • | Incurred $156,800 of selling expenses. |
| • | Incurred $58,300 of administrative expenses. |
a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method.
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$Revenues | |
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Cost of goods sold | |
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$Gross profit | |
| Selling and administrative expenses: | ||
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$Selling expenses | |
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Administrative expenses | |
| Total selling and administrative expenses | fill in the blank 24774bffdf88036_11 | |
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$Operating income |
b. Determine the inventory balances on February 28, the end of the first month of operations.
| Materials inventory, February 28 | $fill in the blank e88a8bf7806704b_1 |
| Work in process inventory, February 28 | $fill in the blank e88a8bf7806704b_2 |
| Finished goods inventory, February 28 | $fill in the blank e88a8bf7806704b_3 |
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