Help with Highlighted Areas Journal Entries, T-Accounts, Cost of Goods Manufactu

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Help with Highlighted Areas

Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold During May, the following transactions were completed and reported by Jerico Company a. Materials purchased on account, $60,100 b. Materials issued to production to fill job-order requisitions: direct materials, $50,000; indirect materials, $8,800 C. Payroll for the month: direct labor, $75,000; indirect labor, $36,000; administrative, $28,000; sales, $19,000 d. Depreciation on factory plant and equipment, $10,400 e. Property taxes on the factory accrued during the month, $1,450 f. Insurance on the factory expired with a credit to the prepaid insurance account, $6,200 g. Factory utilities, $5,500 h. Advertising paid with cash, $7,900 i. Depreciation on office equipment, $800; on sales vehicles, $1,650 j. Legal fees incurred but not yet paid for preparation of lease agreements, $750 k. Overhead is charged to production at a rate of $18 per direct labor hour. Records show 4,000 direct labor hours were worked during the month I. Cost of jobs completed during the month, $160,000 The company also reported the following beginning balances in its inventory accounts Materials Inventory Work-in-Process Inventory Finished Goods Inventory $7,500 37,000 50,000

Explanation / Answer

Schedule of cost of goods manufactured Direct materials 50000 Direct labor 75000 Overhead: Supplies 8800 Indirect labor 36000 Depreciation,plant and equipment 10400 Property taxes 1450 Utilities, factory 5500 Insurance 6200 68350 Add: Overapplied overhead 3650 Overhead applied 72000 Manufacturing costs added 197000 Add: Beginning work in process 37000 LEss: Ending work in process 74000 Cost of goods manufactured 160000 4 Cost of goods sold decreases by $3650

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