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Paha777 [63]
3 years ago
10

Bodin Company manufactures finger splints for kids who get tendonitis from playing video games. The firm had the following inven

tories at the beginning and end of the month of January.
January 1 January 31
Finished goods $ 126,000 $ 117,000
Work in process 233,000 251,000
Raw material 134,000 124,000
The following additional data pertain to January operations.

Raw material purchased $ 191,000
Direct labor 300,000
Actual manufacturing overhead 170,000
Actual selling and administrative expenses 120,000
The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year.

Required:

1. Compute the company’s prime cost for January.

2. Compute the total manufacturing cost for January

3. Compute the cost of goods manufactured for January.

4. Compute the cost of goods sold for January

5. Compute the balance in the manufacturing overhead account on January 31. Debit or Credit?
Business
1 answer:
irina1246 [14]3 years ago
3 0

Explanation:

The computations are shown below:

1. For Prime cost

= Raw material used + Direct labor

where,

Raw material used is

= Beginning raw material inventory + raw material purchased - ending raw material inventory

= $134,000 + $191,000 - $124,000

= $201,000

And, the direct labor is $300,000

So, the prime cost is

= $201,000 + $300,000

= $501,000

2. For total manufacturing cost:

= Direct material used + direct labor cost + manufacturing overhead cos

= $201,000 + $300,000 + $300,000 × 60%

= $681,000

3. For cost of goods manufactured:

Cost of goods manufactured = Opening work in process + Manufacturing cost - ending work in process

= $233,000 + $681,000 - $251,000

= $663,000

4. For cost of goods sold

= Beginning finished goods + Cost of goods manufactured - ending finished goods

= $126,000 + $663,000 - $117,000

= $672,000

5. For balance in the manufacturing overhead account

= Actual manufacturing overhead - applied manufacturing overhead

= $170,000 - $180,000

= $10,000 credit balance i.e over applied

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5 0
3 years ago
Bonita Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held its cash book open so that a more
Soloha48 [4]

Answer:

Bonita Equipment Co.

A. Entries to correct Bonita's accounts at December 31:

Debit Sales revenue $28,000

Credit Cash $28,000

To reverse the cash sales of January recorded in December.

Debit Accounts Receivable $18,000

Credit Cash $17,640

Credit Cash Discounts $360

To reverse the cash receipts of January recorded in December.

Debit Cash $22,450

Debit Cash Discounts $250

Credit Accounts Payable $22,700

To reverse the cash payment of January recorded in December.

B. To some extent, Bonita was able to show a more favorable balance sheet at December 31 by holding its cash book open.  This becomes more pronounced when the working capital elements of the balance sheet are analyzed with ratios.

For example, the current and quick ratios before the above adjustments shows 2.4 and 1.4 respectively.  After the adjustments, the current and quick ratios reduced to 1.74 and 0.92 respectively.

Explanation:

a) Data and Analysis:

Cash Sales $28,000

Collections on account $17,640

Total $45,640

Cash Discounts on collections = $360

Total collections on account $18,000

Cash Disbursements:

Check for payment on account = $22,450

Discounts $250

Total disbursement $22,700

Sales revenue $28,000

Cash $28,000

Accounts Receivable $18,000

Cash $17,640

Cash Discounts $360

Cash $22,450

Cash Discounts $250

Accounts Payable $22,700

                             Before Adjustments  After Adjustments

                                   Debit     Credit    Debit     Credit

Cash                        $39,000                 $15,450($39,000 - $28,000 - $18,000 + $22,450)

Accounts receivable 42,000                  60,000 ($42,000 + $18,000)

Inventory                   67,000                   67,000

Accounts payable                  $45,000                 $67,450 ($45,000 + $22,450)

Other current liabilities             14,200                   14,200

Total                     $148,000  $59,200 $142,450 $81,650

Working capital ratios:

 Before Adjustments                            After Adjustments

Current ratio = $148,000/$59,200      $142,450/$81,650

=                                2.5                             1.74

Quick ratio = $81,000/$59,200            $75,450/$81,650

=                                1.4                              0.92

6 0
2 years ago
What is the PV of an ordinary annuity with 10 payments of $2,700 if the appropriate interest rate is 5.5%? a. $16,576 b. $19,334
jeyben [28]

Answer:

The correct answer is E.

Explanation:

Giving the following information:

Ordinary annuity with 10 payments of $2,700. The interest rate is 5.5%.

First, we need to calculate the final value using the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual pay

FV= {2,700*[(1.055^10)-1]}/0.055= $34,763.45

Now, we can calculate the present value:

PV= FV/(1+i)^n

PV= 34,763.45/(1.055^10)= 20,352

4 0
3 years ago
On December 31, there were 31 units remaining in ending inventory. Using the perpetual LIFO inventory costing method, what is th
PolarNik [594]

Answer:

Cost of ending inventory is $3,550

Revised Question:

The given question is incomplete. The complete question is as follows:

A company had the following purchases and sales during its first year of operations:

Purchases Sales

January 10:  6 units at $120

February 20: 5 units at $125

May 15: 9 units at $130

September 12: 8 units at $135

November 10: 13 units at $140

On December 31, there were 26 units remaining in ending inventory. Using the Perpetual FIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

Explanation:

FIFO (First in First out) inventory system refers to the inventory system in which it is assumes that first purchases are the first sold goods. So for calculating the cost of ending inventory we'll calculate the value of unsold goods.

<em>Calculations:</em>

<h3>                      Unsold goods                        Cost of unsold goods</h3><h3>                                   13                                 (13 X $140) =$1820</h3><h3>                                   8                                  (8 X $135)  =$1080</h3><h3><u>                                   5                                  (5 X $130) =$650</u></h3><h3>Total unsold goods 26 Total cost of unsold goods =$3,550                                             </h3>

So the cost of ending inventory is $3,550

6 0
3 years ago
You have decided to invest in a new business venture that will likely to pay you $800 at the end of each month for the next 10 y
nika2105 [10]

Answer:

PV= $55,760.42

Explanation:

Giving the following information:

Monthly payment= $800

Number of periods= 10*12= 120

Interest rate= 0.12/12= 0.01

The investment is worth its present value.

<u>First, we will calculate the future value and the present value.</u>

FV= {A*[(1+i)^n-1]}/i

A= monthly payment

FV= {800*[(1.01^120) - 1]} / 0.01

FV= $184,030.95

<u>Now, the present value:</u>

PV= FV/(1+i)^n

PV= 184,030.95 / (1.01^120)

PV= $55,760.42

7 0
3 years ago
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