Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold During May, the following transactions were completed and reported...

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Journal Entries, T-Accounts, Cost of Goods Manufactured andSold
During May, the following transactions were completed andreported by Jerico Company:
Materials purchased on account, $60,200.
Materials issued to production to fill job-order requisitions:direct materials, $50,000; indirect materials, $8,700.
Payroll for the month: direct labor, $75,000; indirect labor,$35,000; administrative, $28,000; sales, $19,000.
Depreciation on factory plant and equipment, $10,400.
Property taxes on the factory accrued during the month,$1,450.
Insurance on the factory expired with a credit to the prepaidinsurance account, $6,200.
Factory utilities, $5,500.
Advertising paid with cash, $7,900.
Depreciation on office equipment, $800; on sales vehicles,$1,650.
Legal fees incurred but not yet paid for preparation of leaseagreements, $750.
Overhead is charged to production at a rate of $18 per directlabor hour. Records show 4,000 direct labor hours were workedduring the month.
Cost of jobs completed during the month, $160,000.
The company also reported the following beginning balances inits inventory accounts:
Materials Inventory $7,500
Work-in-Process Inventory 37,000
Finished Goods Inventory 50,000
Required:
3. Prepare a statement of cost of goodsmanufactured.
Jerico Company
Statement of Cost of Goods Manufactured
For the Month Ended May 31, 20XX
$
Overhead:
$
$
Manufacturing costs added $
Cost of goods manufactured $
4. If the overhead variance is all allocated tocost of goods sold, by how much will cost of goods sold decrease orincrease?
by $

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Solution 3:

Jerico Company
Statement of Cost of Goods Manufactured
For the Month Ended May 31, 20XX
Direct material used		$50,000.00
Direct labor		$75,000.00
Overhead:
Indirect materials	$8,700.00
Indirect labor	$35,000.00
Depreciation on factory, plant and equipment	$10,400.00
Property taxes on factory	$1,450.00
Factory insurance	$6,200.00
Factory utilities	$5,500.00
Total overhead incurred	$67,250.00
Overhead applied (4000 * $18)		$72,000.00

Manufacturing costs added		$197,000.00
Add: Beginning WIP		$37,000.00
Less: Ending WIP (Bal fig)		$74,000.00
Cost of goods manufactured		$160,000.00

Solution 4:

If the overhead variance is all allocated to cost of goods sold, then increase or decrease in cost of goods sold = Overhead incurred - Overhead applied = $67,250 - $72,000 = $4,750 decrease.

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Transcribed Image Text

Journal Entries, T-Accounts, Cost of Goods Manufactured andSoldDuring May, the following transactions were completed andreported by Jerico Company:Materials purchased on account, $60,200.Materials issued to production to fill job-order requisitions:direct materials, $50,000; indirect materials, $8,700.Payroll for the month: direct labor, $75,000; indirect labor,$35,000; administrative, $28,000; sales, $19,000.Depreciation on factory plant and equipment, $10,400.Property taxes on the factory accrued during the month,$1,450.Insurance on the factory expired with a credit to the prepaidinsurance account, $6,200.Factory utilities, $5,500.Advertising paid with cash, $7,900.Depreciation on office equipment, $800; on sales vehicles,$1,650.Legal fees incurred but not yet paid for preparation of leaseagreements, $750.Overhead is charged to production at a rate of $18 per directlabor hour. Records show 4,000 direct labor hours were workedduring the month.Cost of jobs completed during the month, $160,000.The company also reported the following beginning balances inits inventory accounts:Materials Inventory$7,500Work-in-Process Inventory37,000Finished Goods Inventory50,000Required:3. Prepare a statement of cost of goodsmanufactured.Jerico CompanyStatement of Cost of Goods ManufacturedFor the Month Ended May 31, 20XX$Overhead:$$Manufacturing costs added$Cost of goods manufactured$4. If the overhead variance is all allocated tocost of goods sold, by how much will cost of goods sold decrease orincrease? by $

Materials Inventory	$7,500
Work-in-Process Inventory	37,000
Finished Goods Inventory	50,000

Jerico Company
Statement of Cost of Goods Manufactured
For the Month Ended May 31, 20XX
		$

Overhead:
	$





	$


Manufacturing costs added		$


Cost of goods manufactured		$