Question

Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $360,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $200,000. b. Raw materials used in production (all direct materials), $185,000. c. Utility bills incurred on account, $70,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (975 hours) Indirect labor Selling and administrative salaries $ 230,000 $ 90,000 $ 110,000 e. Maintenance costs incurred on account in the factory, $54,000. f. Advertising costs incurred on account, $136,000. g. Depreciation was recorded for the year, $95,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $120,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities). I. Manufacturing overhead cost was applied to jobs, $? J. Cost of goods manufactured for the year, $770,000. k. Sales for the year (all on account) totaled $1,200,000. These goods cost $800,000 according to their job cost sheets.

Answer 1

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FORMULAS DATA REVIEW VIEW La Copy 2 AutoSumA , AA == = = 5. FILE HOME INSERT PAGE LAYOUT X Cut Calibri - 11 Paste Format painter BIU Cipboard Font M47 : x fit D [ I G H EX D Normal Conditional Format as Neutral Formatting Table Bad Calculation Good Check Cell A Wrap Test + Merge & Center - Alignment General $ % ) Number = Insert Delete Format Sort Find B Filter - Select- Editing Styles Cells L I J K M N O P Q R S T U V W X Y Z Credit Accounting titles & Explanations Raw materials inventory Accounts payable Debit 200,000 200,000 185,000 work in process inventory Raw materials inventory 185,000 manufacturing overhead utility expense Accounts payable 63000 7000 70,000 work in process inventory Manufacturing overhead Salary expense Salary & wages payable 230,000 90,000 110,000 430,000 51,000 Manufacturing overhead Accounts payable 54,000 136,000 Advertising expense Accounts payable 136,000 Manufacturing overhead Depreciation expense Accumulated depreciation 76000 19000 95,000 Manufacturing overhead Rent expense Accounts payable 102000 18000 120,000 Sheet1 © READY Type here to search o e ê w 9 C e x3 AING 939 AM 1/28/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FORMULAS DATA REVIEW VIEW AA X 2 AutoSum" AYA Copy 5. FILE HOME INSERT PAGE LAYOUT Cut Calibri - 11 Paste Format Painter BIU Cipboard Font Y126 : x for D [ G == = = D Normal Conditional Format as Neutral Formatting Table Bad Calculation Good Check Cell A Wrap Text + Merge & Center - Alignment General $ % ) Number = Insert Delete Format Sort Find B Filter - Select- Editing Styles Cells L I K L M N O P Q R S T U V W X Y Z Manufacturing overhead Rent expense Accounts payable 102000 18000 120,000 390,000 Work in process inventory Manufacturing overhead 390,000 770,000 finished goods inventory Work in process inventory 770,000 1,200,000 Accounts receivable Sales 1,200,000 800,000 cost of goods sold finished goods inventory 800,000 Accounts receivable Berbal 1,200,000 Sales Beg.bal 1,200,000 k. end bal 1,200,000 1,200,000 end bal Raw Materials Beg Bal3 0,000 200,000 cost of goods sold Beg.Bal 800,000 185,000 h. End bal 45,000 End bal 800,000 Sheet10 READY 9:18 AM – Type here to search o De wice x] A LNG 1/28/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? REVIEW VIEW - ox Sign in ! X 2 AutoSum" AY Copy Wrap Text Merge & Center - Alignment General $ % Number D Normal Conditional Format as Neutral Formatting Table Bad Calculation Good Check Cell Insert Delete Format Sort & Find Filter - Select Styles Cells Editing 5. FILE HOME INSERT PAGE LAYOUT FORMULAS DATA Cut Calibri - 11 AA == Paste Format Painter BIU A ' = = Cipboard Fom Y126 : X fit D [ I G L I Work in process Beg Bal 21,000 185,000 770,000 230,000 390000 J O P Q R S T U V W X Y Z K L M N Manufacturing overhead Beg.Bal 63000 390,000 i 90,000 54,000 76000 102000 5,000 End bal Advertising expense Beg.bal 135,000 end bal 56,000 finished goods Bee bal 60,000 770,000 800,000 k End bal 30,000 end bal 136,000 Accumulated Depreciation beg. bal 95,000 Utilities expense Beg bal 7000 End bal 95,000 end bal 7,000 Accounts payable Beg.bal Salaries expense Brg.Bal 110,000 200,000 a. 70,000 C. 54,000 e. 136,000 f. 120,000 h. 690,000 end bel end bal 110,000 Sheet1 6 READY 9:19 AM — Type here to search o e wic e x] A LNG 1/28/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FORMULAS DATA REVIEW VIEW Copy 2 AutoSumA , AA A 5. FILE HOME INSERT PAGE LAYOUT Cut Calibri - 11 Paste Format Painter BIU Cipboard Fom Y126 : X fi D [ I G == = Wrap Text Merge & Center - H EX D Normal Conditional Format as Neutral Formatting Table Bad Calculation Good Check Cell General $ % Number ' = Insert Delete Format Sort & Find Filter - Select Alignment Styles Cells Editing L I J K M N O P Q R S T U V W X Y Z Depreciation expense Bep.bal 19000 End bal 19,000 Salaries & wages payable Berbal 430,000 d. end bal 430,000 rent expense beg bal 18000 18,000 End bal overhead applied - 360,000/900*975- 390000 Schedule of Cost of Goods Manufactured Direct Materials: Beginning raw materials inventory Add purchase of raw materials Total raw materials available less:Ending raw materials inventory Materials used in productiuni Direct Labor Manufacturing overhead applied to work in process total manufacturing costs Add:Beginning work in process inventory 30,000 200,000 230,000 45,000 185.000 230,000 390000 805,000 21,000 826,000 56,000 770,000 112 113 less:Ending work in process inventory Cost of goods manufactured 114 Sheet1 READY Type here to search o e wic e x] 9:19 AM — AENG 19/2020 W

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FILE FORMULAS DATA REVIEW VIEW Copy 2 AutoSumA , AA A == = 5. HOME INSERT PAGE LAYOUT Cut Calibri - 11 Format Painter BIU Cipboard Fom X fic D [ I G Wrap Text Merge & Center - H EX Bad Calculation D Normal Conditional Format as Neutral Formatting Table Good Check Cell Paste General $ % Number ' = Insert Delete Format Sort & Find Filter - Select Alignment Styles Cells Editing Y126 L I J K M N O P Q R S T U V W X Y Z 114 No TR 1 General lournal l manufacturing overhead cost of goods sold Debit Credit 5,000 5,000 Schedule of Cost of goods sold Beginning finished Foods inventory Add:Cost of goods manufactured Cost of gnads available for sale less:ending finished goods inventory Unadjusted cost of goods sold less.overapplied overhead Adjusted cost of goods sold 60.000 770,000 830,000 30,000 800,000 5,000 795,000 1,200,000 795,000 405,000 Income statement Sales cost of goods sold Gross margin Selling and administrative expense Utilities expense Advertising expense Salaries expense Depreciation expense rent expense 7000 136,000 110,000 19,000 18000 141 290,000 115,000 Net operating income 142 143 Sheet1 READY o ewice x] Type here to search c. ENG, 920 AM - 1/28/2020