Lamonda Corp. uses a job order cost system. On April 1, the accounts had balance
ID: 2328222 • Letter: L
Question
Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below: The following transactions occurred during April: (a) Purchased materials on account at a cost of $136,000. (b) Requisitioned materials at a cost of $122,000, of which $28,000 was for general factory use. (c) Recorded factory labor of $155,000, of which $24,000 was indirect. (d) Incurred other costs: Selling expense Factory utilities Administrative expenses Factory rent Factory depreciation $44,000 26,000 15,000 30,000 24,000 (e) Applied overhead at a rate equal to 135 percent of direct labor cost. () Completed jobs costing $375,000. (g) Sold jobs costing $402,000 (h) Recorded sales revenue of $500,000. Required: 1. & 2. Post the April transactions to the T.accounts and compute the balance in the accounts at the end of Apri. Work in ss Inventory Raw Materials Inventory 55,000 Beg. Ba 25,000 a) 25,000 End. Bal End. Bal 55,000Explanation / Answer
Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April Raw Materials Inventory Beg Bal $25,000 Requisitioned (b) $122,000 Purchase (a) $136,000 Bal $39,000 Work in Process Inventory Beg Bal $55,000 Completed Job Costing (f) $375,000 Requisitioned(122000-28000) (b) $94,000 Factory Labor (c ) $131,000 (155000-24000) Overhead rate (e ) $176,850 (155000-24000)*135% Bal $81,850 Finished Goods Inventory Beg Bal $60,000 Sold Job Costing (g) $402,000 Completed Job Costing (f) $375,000 Bal $33,000 Manufacturing Overhead b Requistioned (b) $28,000 Overhead rate applied (e ) $176,850 c Factory Labor (c ) $24,000 d Factory Utilities (d) $26,000 d Factory Rent (d) $30,000 d Factory Depreciation (d) $24,000 $132,000 Overapplied $44,850 Cost of Goods Sold Sale of Job Costing (g) $402,000 Bal $402,000 Sales Revenue Sales (h) $500,000 Bal $500,000 Selling and Administrative Expenses Selling Expenses (d) $44,000 Administrative Expenses (d) $15,000 Bal $59,000 3a Compute over or underapplied manufacturing overhead Manufacturing overhead applied 135%(155000-24000) 176850 Actual Manufacturing overhead 132000 Manufacturing overhead over applied 44850 3b If the Balance in the manufacturing overhead account is closely directly to Cost of Goods Sold, will cost of goods sold Increase or Decrease? Since the manufacturing overhead is over applied, the cost of goods sold would decrease 4 Prepare Lamonda's cost of goods manufactured report for April Lamonda Corp Cost of Goods Manufactured Report For the Month of April Beginning Raw Materials Inventory $25,000 Add : Raw Material Purchases $136,000 Less : Indirect Materials $28,000 Less : Ending raw materials Inventory $39,000 Direct Materials Used 94000 Direct Labor $131,000 Manufacturing overhead applied $176,850 Total Current Manufacturing Costs 401850 Add : Beginning work in process Inventory $55,000 Less : Ending work in process Inventory $81,850 Cost of Goods Manufactured 375000 5 Prepare Lamonda's April Income Statement. Include any Adjustment to Cost of Goods Sold needed to dispose of over or underapplied manufacturing overhead Lamonda Corp Income Statement For the month of April Sales Revenue $500,000 Cost of Goods Sold Beginning Finished Goods Inventory $60,000 Add : Cost of Goods Manufactured $375,000 Less : Ending Finished Goods Manufactured $33,000 Unadjusted Cost of Goods Sold $402,000 Less : Overapplied manufacturing overhead $44,850 Adjusted cost of Goods Sold $357,150 Gross Profit $142,850 Selling and administrative Expenses $59,000 Net Income (Loss) from operations $83,850
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