Question

jurvin enterprises is a manufacturing company with no beginning inventories. a subset of the transactions it recorded during a recent month is shown below.

a. purchased $94,000 in raw materials for cash.
b. $89,000 in raw materials were used in production. of this amount, $78,000 was direct materials and the remainder was indirect materials.
c. paid employees $132,000 cash. of this amount, $112,000 was direct labor and the remainder was indirect labor.
d. paid $143,000 for additional manufacturing overhead costs.
e. applied manufacturing overhead of $152,000 to production using the companys predetermined overhead rate.
f. all of the jobs in process at the end of the month were completed.
g. all of the completed jobs were shipped to customers.
h. any underapplied or overapplied overhead was closed to cost of goods sold.

required:

1. post the above transactions to t-accounts.
2. calculate the adjusted cost of goods sold for the period.

Explanation:

Calculate the underapplied or overapplied manufacturing overhead

Using the Manufacturing Overhead T-Account knowledge point

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Determine the adjusted cost of goods sold

Using the Adjusted Cost of Goods Sold knowledge point

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Answer:

Question 1

The completed T-accounts are posted as shown in the image:

• Cash Ending Balance: Credit balance of \$369,000
• Raw Materials Ending Balance: Debit balance of \$5,000
• Work in Process Ending Balance: \$0 (all jobs completed)
• Finished Goods Ending Balance: \$0 (all completed jobs shipped)
• Manufacturing Overhead Ending Balance: Debit balance of \$22,000 (underapplied)
• Cost of Goods Sold (Unadjusted) Ending Balance: Debit balance of \$342,000

Question 2

The adjusted cost of goods sold for the period is \$364,000.