What is the adjusted ending balance of Cost of Goods Sold? The following transac

Question

What is the adjusted ending balance of Cost of Goods Sold? The following transactions were incurred by Jackson Fabricators during January, the first month of its fiscal year. Record the proper journal entry for each transaction. $195,000 of materials was purchased on account. $194,000 of materials was used in production; of this amount. $167,000 was used on specific jobs. Manufacturing labor and salaries for the month totaled $260,000. A total of $215,000 of manufacturing labor and salaries was traced to specific jobs, and the remainder was indirect labor used in the factory. The company recorded S17,000 of depreciation on the plant and plant equipment. The company also received a plant utility bill for $9,000. $87,000 of manufacturing overhead was allocated to specific jobs. The company received bill for website services for $3,000. By the end of January, was manufacturing overhead overallocated or underallocated? By how much? Control Enterprises produces touch screens for use in various smartphones The company reports the following information at December 31. Control Enterprises began operations on January 31 earlier that same year. What is the cost of direct materials used? What is the cost of indirect materials used? What is the cost of direct labor? What is the cost of indirect labor? What is the cost of goods manufactured? What is the cost of goods sold (before adjusting for any under- or overallocated manufacturing overhead)? What is the actual manufacturing overhead? How much manufacturing overhead was allocated to jobs? What is the predetermined manufacturing overhead rate as a percentage of direct labor cost? Is manufacturing overhead underallocated or overallocated? By how much?

Explanation / Answer

E27A

1. direct material used is $30000

2. Indirect material $3500

explaination

When a manufacturing company uses raw materials in the production process, the Raw Material Inventory account is credited (decreased) and the Work-in-Process Inventory account is debited (increased). Therefore, raw materials used in production (both direct and indirect) are the cost transferred out of the Raw Materials Inventory account and the cost added to the Work-in-Process Inventory account.

Use of direct raw materials in production:

Account Titles

Debit

Credit

Work-in-Process Inventory

30000

      Raw Materials Inventory

30000

The journal entry to record their use is presented below:

3) Use of indirect raw materials in production:

Account Titles

Debit

Credit

Mfg Overhead

3500

      Raw Materials Inventory

Use of direct labor in production:

Account Titles

Debit

Credit

Work-in-Process Inventory

5)  The credit to the Work-in-Process Inventory account represents the cost of the goods manufactured (COGM), while the debit to the Finished Goods Inventory account shows the cost of goods ready to be sold.

i.e 125500

64500

      Wages Payable

64500

6.

7 actual mfg overhead is $ 42000 as rest is Indirect material & indirect labour

8. whole $42000 is allocated to jobs

Account Titles

Debit

Credit

Work-in-Process Inventory

30000

      Raw Materials Inventory

30000

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