FlorenceCo makes and sells floods. The manufacturing process has two stages: Blo
ID: 2339210 • Letter: F
Question
FlorenceCo makes and sells floods. The manufacturing process has two stages: Blowing and Raining. The floods are fabricated in one building and then transferred to the Raining shed to be finished. When the Raining has cured, the floods are transferred to the finished flood showroom. Manufacturing Overhead is applied to the Blowing area based on DL Hours incurred in the Blowing area. Expected Blowing DL Hours for January 2017-500 DL Hours Expected Blowing Overhead $25,000 Manufacturing Overhead is applied to the Raining area based on DL Hours incurred in the Raining area. Expected Raining DL Hours for January 2018-200 DL Hours .Expected Raining Overhead - $5,000 Beginning and ending inventory balances for January: Materials Inventory Blowing WIP $3,000 Finished Floods Inventory $5,000 5,000 Raining WIP $5,000 6,000 $2,000 3,000 1/31/18 2,000 During January of 2018: FlorenceCo purchased $30,000 of Materials Incurred $10,983 of Direct Labor (523 DL Hours @ $21 per DL Hour) in the Blowing area Incurred $4,966 of Direct Labor (191 DL Hours @ $26 per DL Hour) in the Raining area Incurred Manufacturing Overhead in the Blowing area totaling $26,000 Incurred Manufacturing Overhead in the Raining area totaling $4,500 · Required What is Cost of Goods Manufactured for January 2018? . What is Cost of Goods Sold for January 2018 before closing any over/under applied overhead to COGS? What is cOGS if any over/under applied overhead is closed to COGS? . What is FlorenceCo's January gross profit if they sold the finished floods for $100,000?Explanation / Answer
Solution 1:
Predetermined overhead rate - Blowing area = $25,000 / 500 = $50 per hour
Predetermined overhead rate - Raining = $5,000 / 200 = $25 per direct labor hour
Solution 2:
Solution 3:
Total manufacturing overhead incurred = $26,000 + $4,500 = $30,500
Total overhead applied = $26,150 + $4,775 = $30,925
Overapplied overhead = $30,925 - $30,500 = $425
Adjusted cost of goods sold after closing of overapplied overhead = $75,874 - $425 = $75,449
Solution 4:
Gross profit for january = Sales - COGS = $100,000 - $75,449 = $24,551
Cost Sheet - Blowing Particulars Amount Direct material used ($5,000 + $30,000 - $6,000) $29,000.00 Direct labor $10,983.00 Overhead applied (523*$50) $26,150.00 Total cost incurred $66,133.00 Add: Beginning WIP $3,000.00 Less: Ending WIP -$2,000.00 Cost of goods transferred to raining $67,133.00Related Questions
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