Question

Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below: The following transactions occurred during April: (a) Purchased materials on account at a cost of $233,470. (b) Requisitioned materials at a cost of $111,600, of which $15,500 was for general factory use. (c) Recorded factory labor of $224,100, of which $42,175 was indirect. (d) Incurred other costs: Selling expense Factory utilities Administrative expenses Factory rent Factory depreciation $ 35,900 23,400 51,650 11,000 19, 100 (e) Applied overhead at a rate equal to 131 percent of direct labor cost. (f) Completed jobs costing $262,050. (g) Sold jobs costing $323,370. (h) Recorded sales revenue of $506,000. Required: 1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. (Round your answers to 2 decimal places.) 3-a. Compute over- or underapplied manufacturing overhead. (Round your answer to 2 decimal places.) 3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will Cost of Goods Sold increase or decrease? 4. Prepare Lamonda's cost of goods manufactured report for April. (Round your answers to 2 decimal places.) 5. Prepare Lamonda's April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over-or underapplied manufacturing overhead. (Round your answers to 2 decimal places.)

Answer 1

	Raw Materials Inventory
Bal	29,400	111,600	b)
(a)	233,470
Bal.	151,270
	Work in process inventory
Bal	18,200	262,050	f)
(b)	96,100
(c )	181,925
(e )	238321.75
Bal	272,496.75
	Finished Goods inventory
Bal	123,900	323,370	(g)
(f)	262,050
Bal	62,580
	Manufacturing Overhead
Beg bal	0
(b)	15,500	238321.75	e)
( c)	42,175
(d)	23,400
(d)	11,000
(d)	19,100
End bal		127146.75
	Cost of goods sold
Beg bal	0
(g)	323,370
Bal.
	Sales Revenue
Beg.Bal		0
		506,000	(h)
end bal		506,000
	Selling and administrative expense
Beg bal	0
(d)	35,900
(d)	51,650
Bal.	87,550
3-a)
Manufacturing overhead				Overapplied		127,146.75
3-b)	Decrease
Cost of goods manufactured report
Beginning raw materials inventory						29,400
Add:Raw materials purchases						233,470
less:Indirect materials						15,500
less:Ending raw materials inventory						151,270
Direct materials used						96,100
Direct labor						181,925
Manufacturing overhead applied						238321.75
Total current manufacturing costs						516,346.75
Add:Beginning work in process inventory						18,200
less:Ending work in process inventory						272,496.75
Cost of goods manufactured.						262,050.00
Income Statement
Sales Revenue							506,000
Cost of good sold
Beginning finished goods inventory						123,900
Add cost of goods manufactured						262,050.00
less:Ending finished goods inventory						62,580
Unadjusted cost of goods sold						323,370.00
less:Overapplied manufacturing overhead						127,146.75
Adjusted cost of goods sold							196,223.25
Gross profit							309,776.75
Selling & administrative expense							87,550
Net income from operations							222,226.75