Lamonda Corp. uses a job order cost system. On April 1, theaccounts had balances as shown in the T-accounts below:
The following transactions occurred during April:
(a) Purchased materials on account at a cost of$136,000.
(b) Requisitioned materials at a cost of $122,000, ofwhich $28,000 was for general factory use.
(c) Recorded factory labor of $155,000, of which $24,000was indirect.
(d) Incurred other costs:
| | |
| Selling expense | $ | 44,000 |
| Factory utilities | | 26,000 |
| Administrative expenses | | 15,000 |
| Factory rent | | 30,000 |
| Factory depreciation | | 24,000 |
|
(e) Applied overhead at a rate equal to 135 percent ofdirect labor cost.
(f) Completed jobs costing $375,000.
(g) Sold jobs costing $402,000.
(h) Recorded sales revenue of $500,000.
Required:
1. & 2. Post the April transactions to the T-accountsand compute the balance in the accounts at the end of April.
3-a. Compute over- or underapplied manufacturingoverhead.
3-b. If the balance in the Manufacturing Overheadaccount is closed directly to Cost of Goods Sold, will Cost ofGoods Sold increase or decrease?
4. Prepare Lamonda’s cost of goods manufacturedreport for April.
5. Prepare Lamonda’s April income statement.Include any adjustment to Cost of Goods Sold needed to dispose ofover- or underapplied manufacturing overhead.
