A carpenter company uses job-order costing. The following is a summary of factor
ID: 2471962 • Letter: A
Question
A carpenter company uses job-order costing. The following is a summary of factory operations:
Direct materials purchased on account
$125,000
Direct materials requisitioned
$110,000
Direct labor costs incurred
$256,000
Factory Overhead costs incurred (Depreciation Expense only)
$150,000
Cost of goods completed
$515,000
Cost of goods sold
$378,000
Sales on Account
$430,000
Factory overhead applied
?
Factory overhead costs are applied at 50% of direct labor costs.
Required:
1. Prepare the journal entry to dispose of the overhead variance using the immediate write-off method.
2. What is the actual, correct amount of cost of goods sold?
Show steps how you get the answer for #2 please!
Direct materials purchased on account
$125,000
Direct materials requisitioned
$110,000
Direct labor costs incurred
$256,000
Factory Overhead costs incurred (Depreciation Expense only)
$150,000
Cost of goods completed
$515,000
Cost of goods sold
$378,000
Sales on Account
$430,000
Factory overhead applied
?
Explanation / Answer
1)Journal entry
Facotry overhead applied = 256,000 @50% = $128,000
Factory overhead underapplied = 150,000 - 128,000 = $22,000
2) Correct amount of cost of goods sold =378,000 - 22,000
= $400,000
cost of goods sold $22,000 To Factory overhead $22,000Related Questions
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