Gen Combo Fundamentals Of Cost Accounting; Connect Access Card
6th Edition
ISBN: 9781260848700
Author: William N. Lanen Professor, Shannon Anderson Associate Professor, Michael W Maher
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 7, Problem 24E
Assigning Costs to Jobs
Forest Components makes aircraft parts. The following transactions occurred in July:
- 1. Purchased $119,000 of materials.
- 2. Issued $117,600 in direct materials to the production department.
- 3. Issued $8,400 of supplies from the materials inventory
- 4. Paid for the materials purchased in transaction (1).
- 5. Returned $15,400 of the materials issued to production in (2) to the material inventory
- 6. Direct labor employees earned $217,000, which was paid in cash.
- 7. Paid $120,400 for miscellaneous items for the manufacturing plant. Accounts Payable was credited.
- 8. Recognized
depreciation on manufacturing plant of $245,000. - 9. Applied manufacturing
overhead for the month.
Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $3,000,000. Estimated overhead for the year was $2,790,000.
The following balances appeared in the inventory accounts of Forest Components for July:
Required
- a.     Prepare
journal entries to record these transactions. - b.     Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
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Gen Combo Fundamentals Of Cost Accounting; Connect Access Card
Ch. 7 - What are characteristics of companies that are...Ch. 7 - Direct labor-hours and direct labor dollars are...Ch. 7 - What is the purpose of having two manufacturing...Ch. 7 - How does the accountant know what to record for...Ch. 7 - How is job costing in service organizations (for...Ch. 7 - What are the costs of a product using normal...Ch. 7 - Prob. 7RQCh. 7 - What are three common sources of improprieties in...Ch. 7 - In the context of job costing, what are projects?...Ch. 7 - Why do most companies use normal or standard...
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