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 $231,870.
(b) Requisitioned materials at a cost of $111,200, of which $16,500 was for general factory use.
(c) Recorded factory labor of $223,900, of which $42,875 was indirect.
(d) Incurred other costs:

Selling expense	$	35,600
Factory utilities		24,000
Administrative expenses		51,850
Factory rent		11,500
Factory depreciation		19,100

(e) Applied overhead at a rate equal to 130 percent of direct labor cost.
(f) Completed jobs costing $262,750.
(g) Sold jobs costing $323,970.
(h) Recorded sales revenue of $510,000.

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.)

Raw Materials Inventory Work in Process Inventory Beg. Bal. 29,100.00 Beg. Bal. 19,900.00 (a) 231,870.00 (b) (b) 94,700.00 262,750.00 (f) (c) 181,025.00 End. Bal. 260,970.00 (e) End. Bal. 32,875.00 Finished Goods Inventory Manufacturing Overhead Beg. Bal. 124,200.00 Beg. Bal. 0.00 (f) 262,750.00 323,970.00 (g) (b) 16,500.00 (e) (c) 42,875.00 End. Bal. 62,980.00 (d) 11,500.00 (d) 19,100.00 (d) 24,000.00 End. Bal. 113,975.00 Cost of Goods Sold Sales Revenue Beg. Bal. 0.00 Beg. Bal. 0.00 (g) 323,970.00 510,000.00 (h) End. Bal. 323,970.00 End. Bal. 510,000.00 Selling and Administrative Expenses Beg. Bal. (d) 35,600.00 (d) 51,850.00 End. Bal. 87,450.00

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?

	Decrease
	Increase

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	29,100	111,200	b)
(a)	231,870
Bal.	149,770
	Work in process inventory
Bal	19,900	262,750	f)
(b)	94,700
(c )	181,025
(e )	235332.50
Bal	268,207.50
	Finished Goods inventory
Bal	124,200	323,970	(g)
(f)	262,750
Bal	62,980
	Manufacturing Overhead
Beg bal	0
(b)	16,500	235332.50	e)
( c)	42,875
(d)	24,000
(d)	11,500
(d)	19,100
End bal		121357.50
	Cost of goods sold
Beg bal	0
(g)	323,970
Bal.
	Sales Revenue
Beg.Bal		0
		510,000	(h)
end bal		510,000
	Selling and administrative expense
Beg bal	0
(d)	35,600
(d)	51,850
Bal.	87,450
3-a)
Manufacturing overhead				Overapplied		121,357.50
3-b)	Decrease
Cost of goods manufactured report
Beginning raw materials inventory						29,100
Add:Raw materials purchases						231,870
less:Indirect materials						16,500
less:Ending raw materials inventory						149,770
Direct materials used						94,700
Direct labor						181,025
Manufacturing overhead applied						235332.50
Total current manufacturing costs						511,057.50
Add:Beginning work in process inventory						19,900
less:Ending work in process inventory						268,207.50
Cost of goods manufactured.						262,750.00
Income Statement
Sales Revenue							510,000
Cost of good sold
Beginning finished goods inventory						124,200
Add cost of goods manufactured						262,750.00
less:Ending finished goods inventory						62,980
Unadjusted cost of goods sold						323,970.00
less:Overapplied manufacturing overhead						121,357.50
Adjusted cost of goods sold							202,612.50
Gross profit							307,387.50
Selling & administrative expense							87,450
Net income from operations							219,937.50