Assignment
Feathers Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of 2014:
|
Raw materials
Work in process
Finished goods
|
Beginning Balance
$22,000
$52,000
$121,000
|
Ending Balance
$25,000
$34,00
$136,000
|
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 50,000 machine-hours and incur $200,000 in manufacturing overhead cost. The following transactions were recorded for the year:
• Raw materials were purchased, $412,000.
• Raw materials were requisitioned for use in production, $409,000 $(350,000 direct and $59,000 indirect).
• The following employee costs were incurred: direct labor, $370,000; indirect labor, $57,000.
• Factory utility costs, $25,000.
• Depreciation for the year was $54,000 and is related to factory operations.
• Manufacturing overhead was applied to jobs. The actual level of activity for the year was 44,000 machine-hours.
Required:
1. Complete the T-Accounts below.
2. On the following page, prepare a schedule of cost of goods manufactured and cost of goods sold in good form. Include proper headings.
3. Prepare the entry to close the Factory Overhead account.