Accounting Essay

Custom Student Mr. Teacher ENG 1001-04 15 September 2016

Accounting

Problem 1 The Commonwealth Company uses a job-order cost system and applies manufacturing overhead cost to jobs using a predetermined overhead rate basedon the cost of materials used in production. At the beginning of the year, the following estimates were made as a basis for computing the predetermined overhead rate: manufacturing overhead cost,$186,000; direct materials cost,$155,000.

The following transactions took place during the year (all purchases and services were acquired on account): a. b. c. d. Raw materials purchased,$96,000. Raw materials requisitioned for use in production (all direct materials), $88,000. Utility bills incurred in the factory,$17,000. Costs for salaries and wages incurred as follows: Direct labor, $174,000 Indirect labor,$70,000 Selling and administrative salaries, $124,000 Maintenance costs incurred in the factory,$12,000. Advertising costs incurred,$98,000. Depreciation recorded for the year, $75,000 (75% relates to factory assets and the remainder relates to selling and administrativeassets).

Rental cost incurred on buildings, $80,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration). Miscellaneous selling and administrative costs incurred, $12,000. Manufacturing overhead cost was applied to jobs. Cost of goods manufactured for theyear, $480,000. Sales for the year (all on account) totaled $900,000. These goods cost $550,000 to manufacturee. f. g. h. i. j. k. l. Requirements: Prepare journal entries on the following page to record the information above.

Free Accounting Essay Sample

A+

  • Subject:

  • University/College: University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Date: 15 September 2016

  • Words:

  • Pages:

We will write a custom essay sample on Accounting

for only $16.38 $12.9/page

your testimonials