Foxwood Company is a metal and woodcutting manufacturer, selling products to the home construction market. Consider the following data for 2018:
|Lubricants and coolants||5,000|
|Miscellaneous indirect manufacturing labour||40,000|
|Direct manufacturing labour||300,000|
|Direct materials inventory 1 Jan 2018||40,000|
|Direct materials inventory 31 Dec 2018||50,000|
|Finished goods inventory 1 Jan 2018||100,000|
|Finished goods inventory 31 Dec 2018||150,000|
|Work in process inventory 1 Jan 2018||10,000|
|Work in process inventory 31 Dec 2018||14,000|
|Plant leasing costs||54,000|
|Depreciation – plant equipment||36,000|
|Insurance on plant equipment||3,000|
|Direct material purchased||460,000|
|Customer service costs||100,000|
1) Prepare a schedule of cost of goods manufactured.
2) Prepare a schedule of costs of goods sold.
3) Prepare an income statement.
Karlene Industries produces plastic ice cube trays in two processes: heating and stamping. All materials are added at the beginning of the Heating Department process. Karlene uses the weighted averaged method to compute equivalent units.
On 1 November 2016, the Heating Department had in process 1,000 trays that were 70% complete. During November, it started into production 12,000 trays. On 30 November, 2016, 2000 trays that were 60% complete were in process.
The following cost information for the Heating Department was also available.
Work in process, 1 November:
|Direct material (100% complete)||$640|
|Conversion costs (70% complete)||$360|
|Balance in work in process, 1 November||$1,000|
Costs incurred during November:
Direct material $3,000
Direct labour $2,300
Manufacturing overhead $4,050 $6,350
Total production costs incurred during November $9,350
- Analysis of physical flow of units
- Calculation of equivalent units
- Calculation of units cost
- Analysis of total costs
Martinez Building Products Company is one of the largest manufacturers and marketers of unique, custom made residential garage doors in the U.S. It also is a major supplier of industrial and commercial doors, grills, and counter shutters for the new construction, repair, and remodel markets.
Martinez uses a job cost system and applies overhead to production on the basis of direct labour cost. In computing a predetermined overhead rate for the year 2018, the company estimated manufacturing overhead to be $24 million and direct labour costs to be $20 million. In addition, it developed the following information.
Actual costs incurred during 2018
Direct materials used $30,000,000
Direct labour cost incurred 21,000,000
Insurance for factory 500,000
Indirect labour 7,500,000
Factory maintenance 1,000,000
Rent on factory building 11,000,000
Depreciation on factory equipment 2,000,000
- Why is Martinez Building Products Company using a job costing system?
- On what basis does Martinez allocate its manufacturing overhead? Please calculate the predetermined overhead rate for 2018.
- Calculate the amount of the under- or overapplied overhead for 2018.
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