Riverwards Inc. is a small company that manufacturesirrigation systems. The line workers earn $32/hour. The companyuses job order costing and applies manufacturing overhead on thebasis of labor hours. At the beginning of the month, the followingestimates were made:
Estimated Manufacturing Overhead Costs - $270,000
Estimated Direct Labor Hours- 900
Beginning balances for inventory accounts were asfollows:
Raw Materials - $30,000
Work in Process - $41,000 Job 1311
Finished Goods- $150,000 Job 1310
The following transactions took place during the month(all purchases and services were acquired on account):
- $255,000 in raw materials were purchased
- Direct materials were requisitioned for use in Job 1312,$55,000.
- Direct materials were requisitioned for use in Job 1313,$80,000.
- Headquarters incurred $35,000 in utility bills.
- The factory incurred $15,000 in utility bills.
- The record for Job 1311 indicated that 280 labor hours wereused.
- The record for Job 1312 indicated that 375 labor hours wereused.
- The record for Job 1313 indicated that 390 labor hours wereused.
- Jobs 1311 and 1312 were completed during the month.
- Job 1310 and 1312 were sold during the month for $800,000.
- Factory janitor salaries for the month were $5,000.
- The factory managers’ salaries totaled $160,000.
- Indirect materials requisitioned totaled $35,000.
- $100,000 of depreciation on the factory equipment was accruedthis month.
- Advertising costs for the month were $65,000.
Use MS Excel to show t-accounts or journal entries (yourchoice) to record the previous transactions. Also answer thefollowing 5 questions in the spreadsheet. Then upload thefile.
- What is the ending balance for Raw Materials?__________________________
- What is the Cost of Goods Manufactured?_______________________________
- What is the Cost of Goods Sold on the incomestatement____________________
- How much overhead was actually incurred this period?__________________________
- What is the net income for the period?_________________________________
