Antioch Company makes eBook readers. The company had the following amounts at th

Question

Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2014: Cash, $664,000; Raw Materials Inventory, $60,000; Work in Process Inventory, $25,000; Finished Goods Inventory, $49,000; Common Stock, $601,000; and Retained Earnings, $197,000. Antioch experienced the following accounting events during 2014. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions.

1. Paid $30,000 of research and development costs.

2. Paid $67,000 for raw materials that will be used to make eBook readers.

3. Placed $84,000 of the raw materials cost into the process of manufacturing eBook readers.

4. Paid $66,000 for salaries of selling and administrative employees.

5. Paid $109,000 for wages of production workers.

6. Paid $131,000 to purchase equipment used in selling and administrative offices.

7. Recognized depreciation on the office equipment. The equipment was acquired on January, 1, 2014. It has a $11,000 salvage value and a six-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($131,000 – $11,000) ÷ 6 = $20,000

. 8. Paid $144,000 to purchase manufacturing equipment

. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2014. It has a $27,000 salvage value and a nine-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($144,000 – $27,000) ÷ 9 = $13,000.

10. Paid $53,000 for rent and utility costs on the manufacturing facility.

11. Paid $79,000 for inventory holding expenses for completed eBook readers (rental of warehouse space, salaries of warehouse personnel, and other general storage cost).

12. Completed and transferred eBook readers that had total cost of $254,000 from work in process inventory to finished goods.

13. Sold 910 eBook readers for $432,000.

14. It cost Antioch $182,000 to make the eBook readers sold in Event 13.

**********NEED TO FIGURE OUT HOW TO CALCULATE NUMBER FOR OVERHEAD ON THE SCHEDULE OF COST OF GOODS MANUFACTURED AND SOLD.**********

Explanation / Answer

ANTIOCH COMPANY Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31, 2014 Beginning raw materials Inventory                60,000 Purchases                67,000 Raw materials available              127,000 Ending raw materials inventory (127000 - 84000)                43,000 Raw rate used                84,000 Labor              109,000 Overhead              145,000 Total manufacturing costs              338,000 Beginning work in process inventory                25,000 Total work in process inventory              363,000 Ending work in process inventory (363000 -254000)              109,000 Cost of goods manufactured              254,000 Beginning finished goods inventory                49,000 Goods available              303,000 Ending finished goods inventory              121,000 Cost of goods sold              182,000 Calculation of Overhead Dep. On Manufacturing Overhead 13000 Rent & Utility Cost on Manufacturing facility 53000 Inventory Holding Exp. 79000 Total overheads 145000

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