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bekas [8.4K]
3 years ago
11

The following data refers to Huron Corporation for the year 20x2.

Business
1 answer:
Molodets [167]3 years ago
3 0

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.

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