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ACC - StarMart manufactures skateboards

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Question;StarMart manufactures skateboards. The company has a highly;automated production process, so Itallocates;manufacturing overhead based on machine hours. StarMart expects to incur;$340,000 ofmanufacturing overhead costs and to use 5,000 machine hours during;2009.;At the end of 2008;StarMart reported the following inventories;Raw Materials Inventory $30,000;Work in Process Inventory $27,000;Finished Goods Inventory $21,000;During January 2009, StarMart actually used 400 machine hours;and recorded the following transactions;a. Purchased materials on account, $41,000.;b. Used direct materials, $39,000;c. Manufacturing labor cost incurred was $40,000, 90% direct labor;and 10% indirect labor.;d. Used indirect materials, $3,000;e. Incurred other manufacturing overhead cost of $15,000;(credit Accounts Payable).;f. Allocated manufacturing overhead for January 2009.;g. Cost of completed skateboards, $95,000.;h. Sold $192,000 of skateboards on account, cost of;skateboards sold, $101,400 (StarMart uses a;perpetual inventory system).;i. Operating expenses incurred, excluding depreciation was;$52,000 and depreciation was $7,000.;1.;Compute StarMart?s predetermined manufacturing overhead rate for 2009 showing;the entire equation with numerator and denominator in good form.;2.;Create T accounts for the following accounts (a two column table can be used;for T account): Raw Materials Inventory, Work in Process Inventory, Finished;Goods Inventory, Cost of Goods Sold, Manufacturing Overhead, Accounts;Receivable, Sales, Accounts Payable and Wages Payable. Post the inventory;balances and transactions to these accounts and calculate the ending balances.;3.;Record the journal entry to close the ending balance of Manufacturing Overhead.;Post your entry to the T-accounts;4.;Was manufacturing overhead over/underapplied and by how much? (5 points);5.;Prepare a Schedule of Cost of Goods Manufactured (in good form) for the month;of January;6.;Prepare a Schedule of Cost of Goods Sold (in good form) for the month of;January;7.;Prepare an Income Statement for the month of January (in good form). The;company is in the 30% income tax bracket.

 

Paper#41876 | Written in 18-Jul-2015

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