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CoursHeroTranscribedText: eLearning Question 2 FROYA FABRIKKER NS Froya Fabrikker N8 of Bergen, Nonlvay, is a small company that manufactures specialty heavy equipment for use in North Sea oil elds. ( The Norwegian currency is the krone, which is denoted by Nkr.) The company uses a job order costing system and applied manufacturing overhead costs to jobs on the basis of direct labour hours. At the beginning of the year, the following estimates were made for the purpose of computing the predetermined overhead rate: manufacturing overhead cost, Nkr 360,000; and direct labour hours. 900. The following transactions took place during the year (all purchases and services were acquired on account). a. Raw materials purchased for use in production Nkr 200,000 b. Raw materials were requisitioned for use in production (all direct materials), Nkr 185,000. 0. Utility bills were incurred, Nkr 70,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Salary and wage costs were incurred: Direct labor (975 hours) Nkr 230,000 Indirect labor Nkr 90.000 Selling and admin salaries Nkr 110,000 Maintenance costs were incurred in the factory, Nkr 54.000. Advertising costs were incurred, Nkr 136,000. g. Depreciation was recorded for the year, Nkr 95,000 (80% related to factory equipment, and the remainder related to selling administrative equipment). 59" h. Rental costs incurred on buildings, Nkr 120,000 (85% related to factory operations, and the remainder related to selling and administrative facilities). i. Manufacturing overhead cost applied to jobs, Nkr ? Cost of goods manufactured for the year, Nkr 770,000 k. Saies for the year (all on account) totaled Nkr 1,200,000. These goods cost Nkr 800,000 according to their job sheets \. The balances in the inventory accounts at the beginning of the years were: Raw materials Nkr 30,000 Work in process Nkr 21,000 Finished goods Nkr 60,000 Required 1. Prepare journal entries to record the preceding data 2. Prepare a schedule of costs of goods manufactured. 3. Prepare journal entry to close any balance in the Manufacturing Overhead account to costs of goods sold. Prepare a schedule of costs of goods sold. 4. Prepare an income statement for the year. 5 Job 412 was one of the many jobs started and completed during the year. The job required Nkr 8,000 in direct materials and 39 hours of direct labour time at a total direct labour costs of Nkr 9,200. The job contained only four units. If the company bills at a price 60% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer

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