Question

Bakerston Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Raw materials Work in process Finished goods Beginning Balance $ 11,600 $ 32,600 $102,000 Ending Balance $ 15,900 $ 14,300 $125,000 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,400 machine-hours and incur $261,000 in manufacturing overhead cost. The following transactions were recorded for the year: • Raw materials were purchased, $410,000. Raw materials were requisitioned for use in production, $405,700 ($385,000 direct and $20,700 indirect). • The following employee costs were incurred: direct labor, $339,000; indirect labor, $74,000; and administrative salaries, $151,000. • Selling costs, $111,000. • Factory utility costs, $24,000. • Depreciation for the year was $129,000 of which $111,000 is related to factory operations and $18,000 is related to selling, general, and administrative activities. • Manufacturing overhead was applied to jobs. The actual level of activity for the year was 14,300 machine-hours. • Sales for the year totaled $1,284,000. Required: a. Prepare a schedule of cost of goods manufactured in good form. (Do not round predetermined overhead rate. Input all amounts as positive values.)

Answer 1

Bakerston Company
Cost of goods Manufactured Report
For the Month of April
Beginning Raw Material Inventory	$                                                11,600.00
Raw Material Purchases	$                                            4,10,000.00
Less: Ending Raw Material	$                                                15,900.00
Less: Indirect Material	$                                                20,700.00
Direct Material Used=(A)		$              3,85,000.00
Direct Labor=(B)		$              3,39,000.00
Manufacturing Overhead Applied=(C )=(**)		$              2,14,500.00
Total Current Manufacturing cost=(D )=(A)+(B)+(C )		$              9,38,500.00
Add: Beginning Work in Process=(E )		$                 32,600.00
Less: Ending Work in Process=(F)		$                 14,300.00
Cost of goods Manufactured=(D)+(E )-(F)		$              9,56,800.00
(**)=$261000*(14300/17400)	214500
Actual Overhead cost incurred
Indirect Material	$                                                20,700.00
Indirect Labor	$                                                74,000.00
Factory Utilities	$                                                24,000.00
Factory Depreciation	$                                            1,11,000.00
Total=(A)	$                                            2,29,700.00
Overhead Applied=(B)	$                                            2,14,500.00
Under Applied Overhead=(A)-(B)	$                                                15,200.00
Bakerston Company
Income Statement
Sales Revenue=(A)		$           12,84,000.00
Cost of goods sold
Beginning Finished goods inventory	$                                            1,02,000.00
Add: Cost of goods manufactured	$                                            9,56,800.00
Less: Ending Finished goods inventory	$                                            1,25,000.00
Unadjusted cost of goods sold		$              9,33,800.00
Less: Over applied Manufacturing Overhead		$                 15,200.00
Total cost of good sold=(B)		$              9,49,000.00
Gross Profit=(C )=(A)-(B)		$              3,35,000.00
Less: Selling and Administrative Expenses=(D)		$              2,80,000.00
Net Income from Operation=(C )-(D)		$                 55,000.00
Selling & Administrative Expenses
Administrative Salaries	$                                            1,51,000.00
Selling Cost	$                                            1,11,000.00
Depreciation related to selling , general and administrative	$                                                18,000.00
Total	$                                            2,80,000.00