Answered Essay: Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below:

Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below:

The following transactions occurred during April:

(a) Purchased materials on account at a cost of $233,270.
(b) Requisitioned materials at a cost of $111,800, of which $15,200 was for general factory use.
(c) Recorded factory labor of $225,300, of which $43,775 was indirect.
(d) Incurred other costs:

Selling expense $ 35,000
Factory utilities 22,900
Administrative expenses 51,050
Factory rent 11,900
Factory depreciation 19,200

(e) Applied overhead at a rate equal to 135 percent of direct labor cost.
(f) Completed jobs costing $263,450.
(g) Sold jobs costing $323,070.
(h) Recorded sales revenue of $514,000.

Required:
1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. (Round your answers to 2 decimal places.)

Raw Materials Inventory Work in Process Inventory
Beg. Bal. 29,500.00 Beg. Bal. 19,000.00
End. Bal. 29,500.00
End. Bal. 19,000.00
Finished Goods Inventory Manufacturing Overhead
Beg. Bal. 124,200.00 Beg. Bal.
End. Bal. 124,200.00
End. Bal. 0.00
Cost of Goods Sold Sales Revenue
Beg. Bal. Beg. Bal.
End. Bal. 0.00 End. Bal. 0.00
Selling and Administrative Expenses
Beg. Bal.
End. Bal. 0.00

3-a. Compute over- or underapplied manufacturing overhead. (Round your answer to 2 decimal places.)

Manufacturing Overhead

3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will Cost of Goods Sold increase or decrease?
a.Decrease

b.Increase

4. Prepare Lamonda’s cost of goods manufactured report for April. (Round your answers to 2 decimal places.)

LAMONDA CORP.
Cost of Goods Manufactured Report
For the Month of April
Direct Materials Used
Total Current Manufacturing Costs $0.00
Cost of Goods Manufactured

5. Prepare Lamonda’s April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or underapplied manufacturing overhead. (Round your answers to 2 decimal places.)

LAMONDA CORP.
Income Statement
For the Month of April
Cost of Goods Sold
Unadjusted Cost of Goods Sold
Adjusted Cost of Goods Sold
Net Income (Loss) from Operations

Expert Answer

 

Raw Materials Inventory Work in process inventory
Bal 29,500 b) 111,800 bal 19000.00 f) 263,450
a) 233,270 b) 96600.00
c( 181525.00
Bal 150,970 e) 245058.75
end bal 278733.75
finished goods inventory Manufacturing overhead
bal 124,200 g) 323,070 Beg bak 0 e) 245058.75
f) 263,450 b) 15,200
c) 43,775
End bal 64,580 d) 22,900
d) 11,900
d) 19,200
112975
end bal 132,083.75
cost of goods sold Sales revenue
g) 323,070 h) 514,000
bal 323,070 end bal 514,000
Selling and administrative expense
d) 35,000
d) 51,050
End bal 86,050
3a) manufacturing overhead overapplied $132,083.75
3b) Decrease
Cost of goods manufactured report
Beginning raw materials inventory 29,500
Add Raw material purchase 233,270
less indirect materials 15,200
ending raw materials ivnentory 150,970
Direct materials used 96,600
direct labor 181525.00
manufacturing overhead applied 245058.75
total current manufacturing costs 523183.75
add :Beginning work in process inventory 19000.00
less : ending work in process inventory 278733.75
cost of goods manufactured 263450.00
Income statement
Sales revenue 514,000
cost of goods sold
Beginning finished goods inventory 124,200
Add:cost of goods manufactured 263450.00
less:ending finished goods inventory 64,580
unadjusted cost of goods sold 323,070.00
less:overapplied manufacturing overhead $132,083.75 $190,986.25
Gross profit 323013.75
selling & administrative expense 86050.00
net income from operations 236963.75
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