Direct materials and supplies purchased on credit Direct materials used Indirect

Question

Direct materials and supplies purchased on credit Direct materials used Indirect materials issued to various production departments Direct manufacturing labor Indirect manufacturing labor incurred by various production departments Depreciation on building and manufacturing equipment Miscellaneous manufacturing overhead* incurred by various production departments $ 890 780 180 1,370 940 400 560 (ordinarily would be detailed as repairs, photocopying, utilities, etc.) Manufacturing overhead allocated at 190% of direct manufacturing labor costs Cost of goods manufactured Revenues Cost of goods sold (before adjustment for under- or overallocated manufacturing overhead) Inventories, December 31, 2016 (not 2017): 4,140 8,000 4,040

Explanation / Answer

Solution 3:

Solution 4:

Adjusted cost of goods sold after overapplied overhead = $4,040 - $523 = $3,517

Gross Profit for 2017 = $8,000 - $3,517 = $4,483

Gross profit percentage = $4,483 / 8000 = 56%

Manchester press Gross margin percentage of 56% is excellent. This indicates that university of manchester press performed well in 2017. Gross margins above 30% are generally considered very good.

Materials Control Event Debit Event Credit Beg. $180.00 2 $780.00 1 $890.00 3 $180.00 Total $1,070.00 Total $960.00 Bal $110.00

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