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The following data refers to Huron Corporation for the year 20x2.
Sales revenue .......................................................................................$2,105,000
Raw-material Inventory, 12/31/x1 ................................................................ 89,000
Purchases of raw material in 20x2 ............................................................. 731,000
Raw-material inventory, 12/31/x2 ..................................................................59,000
Direct-labor cost incurred ........................................................................... 474,000
Selling and administrative expenses ............................................................269,000
Indirect labor cost Incurred ...........................................................................150,000
Property taxes on factory ................................................................................90,000
Depreciation on factory building ....................................................................125,000
Income tax expense ........................................................................................25,000
Indirect material used ..................................................................................... 45,000
Depreciation on factory equipment ................................................................. 60,000
Insurance on factory and equipment ..............................................................40,000
Utilities for factory ...........................................................................................70,000
Work-In-process Inventory, 12/31/x1 ............................................................... -0-
Work-In-process inventory, 12/3/x2 .................................................................40000
Finished goods inventory, 12/31/xl .................................................................35,000
Finished-goods inventory, 12/31/x2 ................................................................40,000
Applied manufacturing overhead ................................................................. 577,500
Required:
1. Prepare Huronâs schedule of cost of goods manufactured for 20x2.
2. Prepare the companyâs schedule of cost of goods sold for 20x2. The company closes over applied or under applied overhead into Cost of Goods Sold.
3. Prepare the companyâs income statement for 20x2.

Respuesta :

Zviko

Answer:

1. schedule of cost of goods manufactured for 20x2

Beginning Work In Process Inventory                                            $ 0

Direct  Materials ($89,000 + $731,000 - $59,000 - $45,000) $716,000

Direct Labor                                                                                 $474,000

Applied manufacturing overhead                                              $577,500

Less Ending Work In Process Inventory                                    ($40,000)

cost of goods manufactured                                                    $1,727,500

2. schedule of cost of goods sold for 20x2.

Beginning Finished goods inventory                     $35,000

Add cost of goods manufactured                       $1,727,500

Less Ending Finished goods inventory                ($40,000)

Cost of Goods Sold                                             $1,722,500

Adjustment :

Less Under-applied Overheads                             ($2,500)

Adjusted Cost of Goods Sold                            $1,720,000

3. income statement for 20x2.

Sales revenue                                                    $2,105,000

Less Cost of Goods Sold                                 ($1,720,000)

Gross Profit                                                          $385,000

Less Expenses :

Selling and administrative expenses               ($269,000)

Net Profit Before tax                                             $116,000

Income tax expense                                            ($25,000)

Net Income after tax                                              $91,000

Explanation:

Calculation of Actual Overheads Incurred

Indirect labor                                                    $150,000

Property taxes on factory                                 $90,000

Depreciation on factory building                    $125,000

Indirect material used                                       $45,000

Depreciation on factory equipment                $60,000

Insurance on factory and equipment              $40,000

Utilities for factory                                             $70,000

Actual Overheads Incurred                            $580,000

Now,

Where Applied Overheads is $577,500 and Actual Overheads is $580,000, we have an underapplied situation of $2,500 ($580,000 - $577,500).

This under-applied amount is closed off to the cost of goods sold.

Tundexi

1. Computation of the cost of goods manufactured for 20x2

Direct Materials = Beginning Raw-material Inventory + Purchases of raw material -  Closing Raw-material inventory - Indirect material used

Direct Materials = $89,000 + $731,000 - $59,000 - $45,000

Direct Materials = $716,000

Particulars                                                               Amount

Beginning Work In Process Inventory                  $0

Add: Direct Materials                                             $716,000

Add: Direct Labor                                                   $474,000

Add: Applied manufacturing overhead                $577,500

Less: Ending Work In Process Inventory              ($40,000)

Cost of goods manufactured                                $1,727,500

2 .Computation of the cost of goods sold for 20x2

Actual Overheads Incurred = Indirect labor + Property taxes on factory + Depreciation on factory building + Indirect material used + Depreciation on factory equipment + Insurance on factory and equipment + Utilities for factory

Actual Overheads Incurred = $150,000  + $90,000  + $125,000 + $45,000  + $60,000 + $40,000 + $70,000

Actual Overheads Incurred = $580,000

Here, since the Applied Overheads is $577,500 and the Actual Overheads is $580,000, then, we have an under-applied value of $2,500 ($580,000 - $577,500)

Particulars                                                               Amount

Beginning Finished goods inventory                    $35,000

Add: Cost of goods manufactured                        $1,727,500

Less: Ending Finished goods inventory               ($40,000)  

Cost of Goods Sold                                                $1,722,500

Adjustment of Cost of Goods Sold

Cost of Goods Sold                                                 $1,722,500

Less: Under-applied Overheads                             ($2,500)

Adjusted Cost of Goods Sold                                 $1,720,000

3. Computation of the income statement for 20x2.

Particulars                                                             Amount

Sales revenue                                                    $2,105,000

Less: Cost of Goods Sold                                 ($1,720,000

Gross Profit                                                        $385,000

Less: Selling and administrative expenses      ($269,000)

Net Profit Before tax                                          $116,000

Less: Income tax expense                                  ($25,000)

Net Income after tax                                            $91,000

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