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Calculating Inventory

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Assignment 3: Calculating Inventory;Finlon Upholstery Inc. uses a job-order costing system to accumulate manufacturing costs. The company's work-in-process on December 31, 2001, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no finished-goods inventory on this date.;Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the company's practical capacity, in terms of direct-labor hours multiplied by the budgeted direct-labor rate.) Budgeted totals for 2002 for direct labor and manufacturing overhead are $4,200,000 and $5,460,000, respectively. Actual results for the year are as follows;Actual Results;Direct Materials Used $5,600,000.00;Direct Labor $4,350,000.00;Indirect Material Used $65,000.00;Indirect Labor $2,860,000.00;Factory Depreciation $1,740,000.00;Factory Insurance $59,000.00;Factory Utilities $830,000.00;Selling and Administrative Expenses $2,160,000.00;Total $17,664,000.00;Job no. 2077 was completed in January 2002, and there was no work in process at year-end. All jobs produced during 2002 were sold with the exception of Job no. 2143, which contained direct-material costs of $156,000 and direct-labor charges of $85,000. The company charges any under- or over-applied overhead to the cost of goods sold category.;Using the above information, do the following;Calculate the company?s predetermined overhead application rate.;Calculate the additions to the work-in-process inventory account for the direct material used, direct labor, and manufacturing overhead.;Calculate the finished-goods inventory for the 12/31/02 balance sheet.;Calculate the over-applied or under-applied overhead at year-end.;Explain if it is appropriate to include selling and administrative expenses in the cost of goods sold category.;Perform your calculations in an Excel spreadsheet and copy the calculations into a Word document.;Write a 1-page paper in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M1_A3.doc. For example, if your name is John Smith, your document will be named SmithJ_M1_A3.doc.;By Wednesday, November 19, 2014, deliver your assignment to the M1: Assignment 3 Dropbox.;Assignment 3 Grading Criteria Maximum Points;Calculated the company?s predetermined overhead application rate. 24;Calculated the additions to the work-in-process inventory account for the direct material used, direct labor, and manufacturing overhead. 16;Calculated the finished-goods inventory for the balance sheet dated 12/31/02. 20;Calculated the over-applied or under-applied overhead at year-end. 20;Explained if it is appropriate to include the selling and administrative expenses in the cost of goods sold category. 12;Wrote in a clear, concise, and organized manner, demonstrated ethical scholarship in accurate representation and attribution of sources, and displayed accurate spelling, grammar, and punctuation. 8;Total: 100

 

Paper#75551 | Written in 18-Jul-2015

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