Answer:
Supplies expense $2200 Dr
Supplies $2200 Cr
Explanation:
The adjusting entries are made at the end of the accounting period under the accrual basis of accounting. The accrual principle states that the revenue and expenses for a period should be matched and recorded in that particular period.
Supplies expense is calculated by determining the amount of supplies at start of the year and adding the purchases of supplies. At the end of the year, the closing inventory of supplies is determined and the difference between supplies available and the closing inventory is charged as supplies expense.
Supplies expense = Opening Inventory + Purchases - Closing inventory
Supplies expense = 3700 - 1500 = $2200
Answer:
Debit Credit
Work in process inventory $15,000
Manufacturing overhead clearing account $15,000
Explanation:
First determine the amount of applied overhead which can be calculated as follows
Applied overhead=Rate per machine hour*number of hours
Applied overhead=$5*3,000=$15,000
The journal entry for the applied overhead shall be made as follow
Debit Credit
Work in process inventory $15,000
Manufacturing overheads clearing account $15,000
Answer:
Radar's additional income for accepting the order is calculated as follows:
Sales - 320 x $460 = $147,200
less Cost of Sales = 320 x $180 + $48,000 = $105,600
Additional Income = $41,600
Explanation:
The additional income of $41,600 is $147,200 - $105,600, which is the result of deducting cost of sales from Sales.
The cost of sales includes the variable cost per bike, including the incremental fixed costs ($48,000) to make this order.
To make a decision whether to accept an order or not, the company needs to consider all variable costs, including the incremental fixed costs. The resulting additional income is what is available to offset the fixed costs.
