BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

Solutions

Chapter
Section
BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Analyzing manufacturing cost accounts
Summer Boards Company manufactures surf boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for May:

In addition, the following information is available:

  1. Materials and direct labor were applied to six jobs in May:


b.Factory overhead is applied to each job at a rate of 120% of direct labor cost.
c.The May 1 Work in Process balance consisted of two jobs, as follows:


d. Customer jobs completed and units sold in May were as follows:

Instructions

Determine the May 31 balances for each of the inventory accounts and factory overhead.

To determine

Concept introduction:

Direct Cost:

The cost which is directly related to the product and affects those items directly which contribute to the revenue generation in the business is referred as direct cost.It makes a direct relation to the manufacturing cost.

Indirect Cost:

The cost which is not directly related to the product and does not affect those items directly which contribute to the revenue generation in the business is referred as indirect cost. These can be fixed costs or such costs that are incurred as a whole and cannot be related to manufacturing cost.

The balances at May31 for each inventory accounts and factory overhead.

Explanation

The balance of material accounton May 31 is as follows:

    DateParticularsAmount
      ($)
    DateParticularsAmount
      ($)
    May1Opening balance9,000May31Requisitions32,100
    May31Purchases40,000
    May31Closing balance16,900
    Total49,000Total49,000

The balance of work in process accounton May 31 is as follows:

    DateParticularsAmount
      ($)
    DateParticularsAmount
      ($)
    May1Opening balance5,500May31Finished goods39,190
    May31Direct material5,500
    May31Direct Labor12,500
    May31Factory overhead15,000May31Closing balance38,500
    May31Completed jobs39,190
    Total77,690Total77,690

The balance of finished goods accounton

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

If a companys beta were to double, would its required return also double?

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

Describe the eight elements of ERM.

Accounting Information Systems

HAMADA EQUATION Cyclone Software Co. is trying to establish its optimal capital structure. Its current capital ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)