ssuming that Sheffield closes under- or overapplied overhead to Cost of Goods Sold, calculate the cost of goods sold for the year. Calculate adjusted cost of goods sold. 3. Assuming that Sh
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
1. Calculate under- or overapplied
2. Assuming that Sheffield closes under- or overapplied overhead to Cost of Goods Sold, calculate the cost of goods sold for the year. Calculate adjusted cost of goods sold.
3. Assuming that Sheffield prorates under- or overapplied overhead to the appropriate accounts, calculate the adjusted Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold balances for the year.
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- Gerken Fabrication Inc. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of March: a. Compute the total production cost of each job. b. Prepare the journal entries to charge the costs of materials, labor, and factory overhead to Work in Process. c. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. d. Compute the unit cost of each job. e. Compute the selling price per unit for each job, assuming a mark-on percentage of 50%.Leen Production Co. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of May: a. Compute the total production cost of each job. b. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. c. Compute the selling price per unit for each job, assuming a mark-on percentage of 40%. d. Prepare the journal entries to record the sale of Job 1065.Coronado Corp. designs and manufactures mascot uniforms for high school, college, and professional sports teams. Since each team’s uniform is unique in color and design, Coronado uses a job order costing system. On January 1, the T-accounts for some of Coronado’s primary balance sheet accounts were as follows: Raw Materials Inventory Work in Process Inventory 1/1 59,400 1/1 25,500 Finished Goods Inventory Cash 1/1 38,600 1/1 37,200 Accounts Receivable Accounts Payable 1/1 47,300 1/1 41,900 During the year, the following events occurred: 1. Coronado purchased raw materials costing $118,000 on account. 2. Coronado used $149,300 of raw materials in production. Of these, 80% were classified as direct materials and 20% as indirect materials. (Coronado maintains a…
- ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to Work In Process, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: Total materials (direct and indirect) purchased $ 91,600 Indirect materials issued to production 28,200 Total materials issued to production 115,000 Beginning materials inventory 51,600 The debit to Work-in-Process Inventory account for materials is:ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to Work In Process, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: Total materials (direct and indirect) purchased $ 93,500 Indirect materials issued to production 23,200 Total materials issued to production 124,000 Beginning materials inventory 53,700 The debit to Work-in-Process Inventory account for materials is: Multiple Choice $124,000. $23,200. $93,500. $100,800. $53,700.Account Titles and Explanation Debit Credit Direct Materials Inventory 583000 Accounts Payable 58300 (To record purchase of direct materials) Manufacturing Overhead 132000 (10 recora appiiea manuracturing overnead) Supplies Inventory 13200 7. Finished Goods Inventory 2410000 (To record use of indirect materials in production) Work in Process Inventory 569000 Work in Process Inventory 241000 56900 (To record transfer of completed goods to Finished Goods Inventory) Direct Materials Inventory (To record use of direct materials in production) 8. Cost of Goods Sold 2398000 Work in Process Inventory 791000 Wages Payable 79100 Finished Goods Inventory 239800 (To record direct labor payroll) (To record cost of goods sold for the period) Manufacturing Overhead 690000 Accounts Payable 690001 (To record actual manufacturing overhead) Work in Process Inventory 1071000 Manufacturing Overhead 107100
- Concord, Inc. manufactures ergonomically designed computer furniture. Concord uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs: Job No. CC723 CH291 PS812 Job No. CC723 CH291 PS812 DS444 Job No. CC723 Computer caddy Chair CH291 DS444 Item Printer stand On November 30, Concord's Direct Materials Inventory account totaled $671,000, and its Finished Goods Inventory totaled $3,486,400. Concord applies manufacturing overhead on the basis of machine hours. The company's manufacturing overhead budget for the year totaled $4,750,000, and the company planned to use 950,000 machine hours during the year. Through the first eleven months of the year, the company used a total of 840,000 machine hours, total manufacturing overhead amounted to $4,294,500, and Cost of Goods Sold was $8,760,250. For the purposes of this problem, ignore year-end disposition of over / under applied overhead. Concord purchased $638,000 in direct materials in…ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to Work In Process, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: Total materials (direct and indirect) purchased Indirect materials issued to production Total materials issued to production Beginning materials inventory $ 91,900 11,900 134,000 54,000 The amount of direct materials issued is:Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2018 follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $16,800 6,800 20,100 The following transactions occurred during January: (a) Purchased materials on account for $26,600. (b) Issued materials to production totaling $20,100, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $17,100 were recorded as follows: $10,600 for assembly workers 2,200 for factory supervision 1,400 for administrative personnel 2,900 for sales commissions (d) Recorded depreciation: $4,700 for factory machines, $1,300 for the copier used in the administrative office. (e) Recorded $1,100 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f)…
- ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to Work In Process, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: Total materials (direct and indirect) purchased $ 93,200 Indirect materials issued to production 27,100 Total materials issued to production 119,000 Beginning materials inventory 52,900 The credit to the materials inventory account for materials used is: Multiple Choice $119,000. $27,100. $93,200. $91,900. $52,900.Curtis Inc. uses a job order costing system. Manufacturing overhead is applied on the basis of direct labor cost. Total manufacturing overhead was estimated to be $53,165 for the year; direct labor was estimated to total $151,900. (12/31) $ 10,400 $ 14,200 $ 22,800 $ 18,000 $ 34,800 $ 40,800 (1/1) Raw Materials Inventory Work in Process Inventory Finished Goods Inventory The following transactions have occurred during the year. Raw materials purchases $103,000 $ 92,100 $148,400 $ 1,100 $ 16,800 $ 24,100 $ 19,200 $ Direct materials used Direct labor Indirect materials used Indirect labor Factory equipment depreciation Factory rent Factory utilities Other factory costs 7,700 $ 6,700 (a) Calculate the predetermined overhead rate. Predetermined Overhead Rate % (b) Calculate cost of goods manufactured. Cost of Goods Manufactured (c) Calculate the over- or underapplied overhead. (Input all amounts as positive values.) OverheadChristopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2018 follow: Raw Materials Inventory $16,800 Work in Process Inventory Finished Goods Inventory 6,800 20,100 The following transactions occurred during January: (a) Purchased materials on account for $26,600. (b) Issued materials to production totaling $20,100, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $17,100 were recorded as follows: $10,600 for assembly workers 2,200 for factory supervision 1,400 for administrative personnel 2,900 for sales commissions (d) Recorded depreciation: $4,700 for factory machines, $1,300 for the copier used in the administrative office. (e) Recorded $1,100 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f)…