Answer:
Ricci Manufacturing Corporation
a. Journal Entries;
1. Debit Raw Materials Inventory $75,000
Credit Accounts Payable $75,000
To record the purchase of materials on account.
2. Debit Factory Wages $80,000
Credit Factory Wages Payable $80,000
To record factory labor incurred on account.
3. Debit Manufacturing Overhead:
Utilities $6,800
Depreciation $8,000
Machinery Repairs $9,200
Factory Insurance $9,000
Credit: Accounts Payable $25,000
Accumulated Depreciation $8,000
To record manufacturing overhead costs incurred.
4. Debit Work in Process $80,000
Credit Factory Wages $80,000
To record the assignment of factory labor to jobs.
5. Debit Work in Process $36,000
Credit Manufacturing Overheads $36,000
To apply overhead to jobs.
b. Manufacturing cost and Inventory Accounts:
Raw Materials
Accounts Titles Debit Credit
Balance $17,000
Accounts payable 75,000
Work in Process 73,000
Balance $19,000
Work in Process
Accounts Titles Debit Credit
Balance $9,000
Raw materials 73,000
Factory Wages 80,000
Manuf. Overhead 36,000
Finished Goods $184,000
Balance $14,000
Finished Goods
Accounts Titles Debit Credit
Balance $11,000
Work in Process 184,000
Cost of goods sold $187,000
Balance $8,000
c. Computation of:
1. Raw materials used
= Beginning Inventory + Purchases - Ending Inventory
= $17,000 + $75,000 - $19,000
= $73,000
2. Completed jobs transferred to finished goods
= Beginning WIP + Raw materials used + Labor + Overhead - Ending WIP
= $9,000 + $73,000 + $80,000 + $36,000 - $14,000
= $184,000
3. Cost of goods sold
= Beginning Finished Goods + Manufacturing Costs - Ending Finished Goods
= $11,000 + $184,000 - $8,000
= $197,000
4. Under- or overapplied overhead
= Total Incurred manufacturing overhead - applied manufacturing overhead
= $33,000 - $36,000
= $3,000 over-applied
Explanation:
a) Data:
Beginning Ending
Inventories:
Raw materials $17,000 $19,000
Work in process 9,000 14,000
Finished goods 11,000 8,000
Total $37,000 $41,000
