Asked by Savannah Pulliam on May 05, 2024
Verified
The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31 2017: Beginning Ending Inventories: Raw materials $17,000$19,000 Work in process 9,00014,000 Finished goods 11,0008,000 Total $37,000‾$41,000‾\begin{array} { c r r } & \text { Beginning } & \text { Ending } \\\text { Inventories: } & & \\\text { Raw materials } & \$ 17,000 & \$ 19,000 \\\text { Work in process } & 9,000 & 14,000 \\\text { Finished goods } & 11,000 & 8,000 \\\text { Total } & \underline { \$ 37,000 } & \underline { \$ 41,000 }\end{array} Inventories: Raw materials Work in process Finished goods Total Beginning $17,0009,00011,000$37,000 Ending $19,00014,0008,000$41,000 In addition the following transactions occurred in 2017:
1. Raw materials purchased on account $75000.
2. Incurred factory labor $80000 all is direct labor. (Credit Factory Wages Payable).
3. Incurred the following overhead costs during the year: Utilities $6800 Depreciation on manufacturing machinery $8000 Manufacturing machinery repairs $9200 Factory insurance $9000 (Credit Accounts Payable and Accumulated Depreciation).
4. Assigned $80000 of factory labor to jobs.
5. Applied $36000 of overhead to jobs.
Instructions
(a) Journalize the above transactions.
(b) Reproduce the manufacturing cost and inventory accounts. Use T-accounts.
(c) From an analysis of the accounts compute the following:
1. Raw materials used.
2. Completed jobs transferred to finished goods.
3. Cost of goods sold.
4. Under- or overapplied overhead.
Inventory Information
Details about the quantities, locations, and values of a company's inventory, used for managing and reporting purposes.
Manufacturing Cost
The total cost incurred by a company to produce a specific quantity of a product, including direct labor, raw materials, and overhead.
Raw Materials Used
The total cost of all components and materials directly used to manufacture a product within a specific period.
- Acquire knowledge on the recording process of raw materials, work in process, finished goods, and manufacturing overhead within a job order costing framework.
- Draft bookkeeping records for transactions pertinent to raw materials, labor charges, overhead expenses, and sales procedures.
- Ascertain the cost of goods sold, with corrections for overapplied or underapplied overhead included.
Verified Answer
2. Completed jobs transferred to finished goods = W/P debits
$9000 + $73000 + $116000 - $14000 = $184000.
3. Cost of goods sold = $11000 + $184000 - $8000 = $187000.
4. Overhead overapplied = $3000 (credit balance in Manufacturing Overhead).
Learning Objectives
- Acquire knowledge on the recording process of raw materials, work in process, finished goods, and manufacturing overhead within a job order costing framework.
- Draft bookkeeping records for transactions pertinent to raw materials, labor charges, overhead expenses, and sales procedures.
- Ascertain the cost of goods sold, with corrections for overapplied or underapplied overhead included.
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