M2A2 Assignment 2: Calculating Inventory

profileRAJV47

Finlon Upholstery Inc. uses a job-order costing system to accumulate manufacturing costs. The company's work-in-process on December 31, 2001, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no finished-goods inventory on this date.

Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the company's practical capacity, in terms of direct-labor hours multiplied by the budgeted direct-labor rate.) Budgeted totals for 2002 for direct labor and manufacturing overhead are $4,200,000 and $5,460,000, respectively. Actual results for the year are as follows:

Actual Results 
Direct Materials Used$5,600,000.00
Direct Labor$4,350,000.00
Indirect Material Used$65,000.00
Indirect Labor$2,860,000.00
Factory Depreciation$1,740,000.00
Factory Insurance$59,000.00
Factory Utilities$830,000.00
Selling and Administrative Expenses$2,160,000.00
Total$17,664,000.00

Job No. 2077 was completed in January 2002 and there was no work in process at year-end. All jobs produced during 2002 were sold with the exception of Job No. 2143, which contained direct-material costs of $156,000 and direct-labor charges of $85,000. The company charges any under- or over-applied overhead to the cost of goods sold category.

Using the above information, do the following:

  • Calculate the company’s predetermined overhead application rate.
  • Calculate the additions to the work-in-process inventory account for the direct material used, direct labor, and manufacturing overhead.
  • Calculate the finished-goods inventory for the 12/31/01 balance sheet.
  • Calculate the over-applied or under-applied overhead at year end.
  • Explain if it is appropriate to include selling and administrative expenses in the cost of goods sold category.

Perform your calculations in an Excel spreadsheet and copy the calculations into a Word document.

Write a 1-page paper in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M2_A2.doc.

    • 12 years ago
    • 3
    Answer(10)

    Purchase the answer to view it

    blurred-text
    • attachment
      finlon_upholstery_solution.xlsx

    Purchase the answer to view it

    blurred-text
    • attachment
      m2a2_assignment_2_calculating_inventory.docx
    • attachment
      m2a2_assignment_2_calculating_inventory.xlsx

    Purchase the answer to view it

    blurred-text
    • attachment
      m2a2_-assignment.xls
    • attachment
      lastnamefirstinitial_m2_a2.doc

    Purchase the answer to view it

    blurred-text
    • attachment
      847157861_solution.docx

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      m2a2_assignment_2.doc

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      8471561_solution.docx

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      solution_file.docx

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      your_name.docx
    • attachment
      your_name.xlsx

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      finlon_upholstery_inc..docx

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      calculating_inventory.docx
    Bids(0)