Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures spec
ID: 2418504 • Letter: F
Question
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $349,800 of manufacturing overhead for an estimated allocation base of 1,060 direct labor-hours. The following transactions took place during the year (all purchases and services were acquired on account):
Depreciation was recorded for the year, $90,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment).
Rental cost incurred on buildings, $115,000 (80% related to factory operations, and the remainder related to selling and administrative facilities).
Cost of goods manufactured for the year, $830,000.
Sales for the year (all on account) totaled $1,500,000. These goods cost $860,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were:
Post your entries to T-accounts. (Don’t forget to enter the opening inventory balances above.) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account.
Prepare a schedule of cost of goods manufactured.
Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Prepare an income statement for the year.
Job 412 was one of the many jobs started and completed during the year. The job required $8,600 in direct materials and 40 hours of direct labor time at a total direct labor cost of $9,500. If the job contained five units and the company billed at 65% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer?
a. Raw materials purchased for use in production, $230,000. b. Raw materials requisitioned for use in production (all direct materials), $215,000. c. Utility bills were incurred, $65,000 (85% related to factory operations, and the remainder related to selling and administrative activities). d. Salary and wage costs were incurred:Explanation / Answer
T - Accounts
Raw Materials Inventory
Wages payable
Work in process inventory
Manufacturing overhead
Finished goods inventory
Cost of goods sold
Sales
Schedule cost of goods manufactured
Journal entry to close the manufacturing overhead
Opening balance $36,000 Work in process $215,000 To Purchases 230,000 Ending Balance 51,000Related Questions
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