PROBLEM 3-16 Comprehensive Problem L03-1, LO3-2, LO3-4Cold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages forthe South China market, The company sells its birdcages through an extensive network of streetvendors who receive commissions on their sales.The company unes a job-order costing system in which overhead is applied to jobs on thebasis of direct labor cost. Its predetermined overhead rate is based on a cost formula thad esti-maled S330,000 of manufacturing overhead for an estimated activity level of $200,000 direct labordollars. At the beginning of the year, the inventory balances were as follows:$25,000$10,000Raw materialsWork in processFinished goods$40,000Daring the year, the following transactions were completed:Raw materials purchased on account, $275,000.b.Raw materials aused in production, $280,000 (materials costing $220,000 waredirectly to jobs; the remaining materials were indirect).C. Costs for employee services were incurred as follows:$180,000$72,000$63,000Direct laborIndirect laborSales commissionsAdministrative salaries$90,000d.Rent for the year was $18,000 ($13,000 of this amount related to factory operations, and theremainder related to selling and administrative activities),Unlity costs incurred in the factory, $57,000.L Advertising costs incurred, $140,000.E Depreciation recorded on equipment, $100,000. ($88,000 of this amount related to equipmentused in factory operations; the remaining $12,000 related to equipment used in selling andadministrative activities.)A Manufacturing overhead cost was applied to jobs, $?Goods that had cost $675,000 to manufacture according to their job cost sheets werec.completed.Sales for the year (all paid in cash) totaled $1.250,000. The total cost to manufacture thesegoods according to their job cost sheets was $700,000.Required1 Prepare journal entries to record the transactions for the year.2 Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost ofGoods Sold. Post relevant data from your journal entries to these T-accounts (don't forgetto enter the beginning balances in your inventory accounts). Compute an ending balance incach account.

Work in process inventory for entry h : = $ 180000 * 330000 / 200000 = $ 297000

PROBLEM 3-1G Comprehensive Problem LO3-1, LO3-2, LO3-4 Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South Chima market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. The company unes a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula thad esti- mated 53.30,000 of manufacturing overhead for an estimated activity level of $200,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: $25,000 $10,000 $40,000 Raw materials ww.. Work in process Finished goods ...... Daring the ycat, the following transactions were completed: Raw materials purchased on account, $275,000. b. a. Raw materials ased in production, $280,000 (materials costing $220,000 wae c directly to jobs; the remaining materials were indirect). C. Costs for employee services were incurred as follows: $180,000 $72,000 Direct labor Indirect labor Sales commissions $63,000 Administrative salaries $90,000 d. Rent for the year was $18,000 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities), C Utility costs incurred in the factory, $57,000. LAdvertising costs incurred, $140,000. Depreciation recorded on equipment, $100,000. ($88,000 of this amount related to equipment 8- used in factory operations; the remaining $12,000 related to equipment used in selling and administrative activities.) A Manufacturing overhead cost was applied to jobs, $ ? Goods that had cost $675,000 to manufacture according to their job cost shcets were . completed. i Sales for the year (all paid in cash) totaled $1.250,000. The total cost to manufacture these goods according to their job cost sheets was $700,000. Required L Prepare journal entries to record the transactions for the year. 2 Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts). Compute an ending balance in cach account.

PROBLEM 3-1G Comprehensive Problem LO3-1, LO3-2, LO3-4 Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South Chima market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. The company unes a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula thad esti- mated 53.30,000 of manufacturing overhead for an estimated activity level of $200,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: $25,000 $10,000 $40,000 Raw materials ww.. Work in process Finished goods ...... Daring the ycat, the following transactions were completed: Raw materials purchased on account, $275,000. b. a. Raw materials ased in production, $280,000 (materials costing $220,000 wae c directly to jobs; the remaining materials were indirect). C. Costs for employee services were incurred as follows: $180,000 $72,000 Direct labor Indirect labor Sales commissions $63,000 Administrative salaries $90,000 d. Rent for the year was $18,000 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities), C Utility costs incurred in the factory, $57,000. LAdvertising costs incurred, $140,000. Depreciation recorded on equipment, $100,000. ($88,000 of this amount related to equipment 8- used in factory operations; the remaining $12,000 related to equipment used in selling and administrative activities.) A Manufacturing overhead cost was applied to jobs, $ ? Goods that had cost $675,000 to manufacture according to their job cost shcets were . completed. i Sales for the year (all paid in cash) totaled $1.250,000. The total cost to manufacture these goods according to their job cost sheets was $700,000. Required L Prepare journal entries to record the transactions for the year. 2 Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts). Compute an ending balance in cach account.

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 2ADM

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