Tiêu đề Revision Ch 1&2.pptx ✅

Section 5
Problem (1-7): White Plate Construction was established in the month of September and recorded the subsequent transactions throughout its initial month of functioning. Sept. 5The materials were acquired on credit for a total amount of $2,400,000. Sept. 9The cost for the job no. 500 involved the use of materials valued at $1,350,000. Sept. 14The cost for the job no. 501 involved the use of materials valued at $400,000. Sept. 18 The cost for the job no. 502 involved the use of materials valued at $200,000. Sept. 25The applied direct labor costs were allocated to the respective jobs as follows: job no. 500 incurred a cost of $10,800, job no. 501 incurred a cost of $16,200, and job no. 502 incurred a cost of $4,050. The hourly wage for direct labor workers is $18. Sept. 27 The applied manufacturing overhead was allocated to all jobs by using a rate of $1,350 per direct labor hour. Sept. 28 The jobs denoted as job no. 500 and job no. 501 have been completed successfully and thereafter transferred to the warehouse designated for finished goods. Sept. 29 The job with identification number 500 was successfully sold, generating a revenue of $2,175,000. Sept. 31 The manufacturing overhead costs for the month of September, amounting to $746,250, were accurately recorded and then settled by cash payment. Sept. 31The Manufacturing Overhead account was closed directly to the Cost of Goods Sold. Required: Prepare journal entries for each of the aforementioned transactions. b. Calculate the balance of the Cost of Goods Sold account as of September 30. c. Determine the inventory balances of the firm on September 30. d. In the month of September, was there an overapplication or underapplication of manufacturing overhead? Discuss. Solution
Sept. 25 - Allocation of direct labor costs: Calculate hours for each job: Job 500: 10,800/18=600 hours Job 501: 16,200/18=900 hours Job 502: 4,050/18=225 Sept. 27 - Applied manufacturing overhead: Using a rate of $1,350 per direct labor hour: Job 500: 600×1,350=810,000 Job 501: 900×1,350=1,215,000 Job 502: 225×1,350=303,750 Sept. 31 - Close Manufacturing Overhead to COGS: Total applied overhead: $2,328,750 Actual overhead: $746,250 Overapplied: 2,328,750−746,250=1,582,500 Part b: Balance of the Cost of Goods Sold Account Total cost of Job No. 500 = $2,170,800 Overapplied overhead reduced COGS = 2,170,800 −1,582,500=588,300 COGS = $588,300
Part c: Inventory Balances Materials Inventory: Purchased: $2,400,000 Used: 1,350,000+400,000+200,000=1,950,000 Remaining: 2,400,000−1,950,000=450,000 Work in Process (Job 502): Direct Materials: $200,000 Direct Labor: $4,050 Applied Overhead: $303,750 Total: 200,000+4,050+303,750=507,800 Finished Goods Inventory: Job No. 501: $1,831,200 (unsold) Total: $1,831,200 Part d: Overapplied or Underapplied Manufacturing Overhead Overapplied: $1,582,500 Discussion: Since more overhead was applied than was actually incurred, this represents overapplication of manufacturing overhead. It reduces the cost of goods sold, leading to a favorable impact on profitability for September