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ACCT 386 - Week 2 - Homework - Question 3

ACCT 386 - Week 2 - Homework - Question 3
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ACCT 386 - Week 2 - Homework - Question 3

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Question 3

Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $243,200 of manufacturing overhead for an estimated allocation base of $152,000 direct material dollars.

The following transactions took place during the year (all purchases and services were acquired on account):

a.

Raw materials purchased, $145,000.

b.

Raw materials requisitioned for use in production (all direct materials), $143,000.

c.

Utility bills incurred in the factory, $22,000.

d.

Costs for salaries and wages were incurred as follows:

  

 

 

  Direct labor

$

216,000  

  Indirect labor

$

90,200  

  Selling and administrative salaries

$

142,000  


e.

Maintenance costs incurred in the factory, $23,000.

f.

Advertising costs incurred, $121,000.

g.

Depreciation recorded for the year, $43,000 (70% relates to factory assets, and the remainder relates to selling and administrative assets).

h.

Rental cost incurred on buildings, $85,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration).

i.

Miscellaneous selling and administrative costs incurred, $13,000.

j.

Manufacturing overhead cost was applied to jobs, $ ?

k.

Cost of goods manufactured for the year, $557,000.

l.

Sales for the year (all on account) totaled $1,300,000. These goods cost $510,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were as follows:

  

 

 

  Raw materials

$

16,000  

  Work in process

$

25,000  

  Finished Goods

$

33,000