Fisher Company Solutions
Essay by HenryMa • March 24, 2017 • Course Note • 1,530 Words (7 Pages) • 1,079 Views
FISHER COMPANY SOLUTIONS
1. | Journal entries: | |||
(a) | Raw Materials | 60,000 | ||
Accounts Payable | 60,000 | |||
(b) | Work in Process | 50,000 | ||
Manufacturing Overhead | 2,000 | |||
Raw Materials | 52,000 |
(c) | Work in Process | 60,000 | |||
Manufacturing Overhead | 15,000 | ||||
Salaries and Wages Payable | 75,000 | ||||
(d) | Manufacturing Overhead | 40,000 | |||
Cash | 40,000 | ||||
(e) | Manufacturing Overhead | 13,000 | |||
Property Taxes Payable | 13,000 | ||||
(f) | Manufacturing Overhead | 7,000 | |||
Prepaid Insurance | 7,000 | ||||
(g) | Manufacturing Overhead | 18,000 | |||
Accumulated Depreciation | 18,000 | ||||
(h) | Work in Process | 90,000 | |||
Manufacturing Overhead | 90,000* | ||||
Predetermined overhead rate = Budgeted manufacturing overhead = 1,200,000 Budgeted machine hours 200,000 = $6/MH | |||||
*Applied manufacturing overhead = 15,000 machine hours × $6 per MH. | |||||
(i) | Salaries Expense | 30,000 | |||
Salaries and Wages Payable | 30,000 | ||||
(j) | Depreciation Expense | 7,000 | |||
Accumulated Depreciation | 7,000 | ||||
(k) | Advertising Expense | 42,000 | |||
Cash ….. | 42,000 | ||||
(l) | Other Selling and Administrative Expense | 8,000 | |||
Cash…. | 8,000 | ||||
(m) | Finished Goods | 158,000 | |||
Work in Process | 158,000 | ||||
(n) | Accounts Receivable | 225,000 | |||
Sales | 225,000 | ||||
Cost of Goods Sold | 118,500 | ||||
Finished Goods | 118,500 |
2. | T-accounts and posting of journal entries: | |||||||
Accounts Receivable | Accounts Payable | |||||||
Bal | XXX | XXX | Bal | |||||
(n) | 225,000 | 60,000 | (a) | |||||
Prepaid Insurance | Raw Materials | |||||||
Bal. | XXX | 7,000 | (f) | Bal. | 7,000 | 52,000 | (b) | |
(a) | 60,000 | |||||||
Bal. | 15,000 |
Salaries and Wages Payable | Sales | |||||||
Bal. | XXX | 225,000 | (n) | |||||
75,000 | (c) | |||||||
30,000 | (i) | |||||||
Work in Process | Manufacturing Overhead | |||||||
Bal. | 30,000 | 158,000 | (m) | (b) | 2,000 | 90,000 | (h) | |
(b) | 50,000 | (c) | 15,000 | |||||
(c) | 60,000 | (d) | 40,000 | |||||
(h) | 90,000 | (e) | 13,000 | |||||
Bal. | 72,000 | (f) | 7,000 | |||||
(g) | 18,000 | |||||||
Bal. | 5,000 | |||||||
Property Taxes Payable | Cost of Goods Sold | |||||||
XXX | Bal. | (n) | 118,500 | |||||
13,000 | (e) | |||||||
Finished Goods | Depreciation Expense | |||||||
Bal. | 10,000 | (j) | 7,000 | |||||
(m) | 158,000 | 118,500 | (n) | |||||
Bal. | 49,500 | |||||||
Accumulated Depreciation | Advertising Expense | |||||||
XXX | Bal. | (k) | 42,000 | |||||
18,000 | (g) | |||||||
7,000 | (j) | |||||||
Other Selling & Admin Expense | Salaries Expense | |||||||
(l) | 8,000 | (i) | 30,000 | |||||
Cash | ||||||||
Bal | XXX | 40,000 | (d) | |||||
| 42,000 | (k) | ||||||
8,000 | (l) | |||||||
3. | (a) | Calculation of actual overhead: | |||
Indirect material | $ 2,000 | ||||
Indirect Labor | 15,000 | ||||
Depreciation: factory building and equipment | 18,000 | ||||
Rent: factory equipment | 16,000 | ||||
Utilities | 21,000 | ||||
Property taxes | 13,000 | ||||
Insurance | 7,000 | ||||
Miscellaneous Factory Costs | 3,000 | ||||
Total actual overhead | $95,000 | ||||
(b) | Underapplied overhead | = | [pic 1] | ||
= | $95,000 – $90,000* | ||||
= | $5,000 underapplied | ||||
*$90,000 = 15,000 direct-labor hours × $6 per hour. | |||||
(c) | Cost of Goods Sold | 5,000 | |||
Manufacturing Overhead | 5,000 |
4. | FISHER COMPANY | ||
Direct material: | |||
Raw-material inventory, April 1 | $7,000 | ||
Add: Purchases of raw material | 60,000 | ||
Raw material available for use | $67,000 | ||
Deduct: Raw-material inventory, April 30 | 15,000 | ||
Raw material used | $ 52,000 | ||
Less: Indirect materials included in manufacturing overhead ........................................ | 2,000 | $50,000 | |
Direct labor | 60,000 | ||
Manufacturing overhead: | |||
Indirect material | $ 2,000 | ||
Indirect Labor | 15,000 | ||
Depreciation: factory building and equipment | 18,000 | ||
Rent: factory equipment | 16,000 | ||
Utilities | 21,000 | ||
Property taxes | 13,000 | ||
Insurance | 7,000 | ||
Miscellaneous Factory Costs | 3,000 | ||
Total actual manufacturing overhead ............. | 95,000 | ||
Less: Underapplied overhead ......................... | (5,000) | ||
Overhead applied to work in process ................... | 90,000 | ||
Total manufacturing costs | $ 200,000 | ||
Add: Work-in-process inventory, April 1 | 30,000 | ||
Subtotal | $230,000 | ||
Deduct: Work-in-process inventory, April 30 | 72,000 | ||
Cost of goods manufactured | $ 158,000† |
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