The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31 2017: $$37,000‾$41,000‾\begin{array} { c r r } & \text { Beginning } & \text { Ending } \\\text { Inventories: } & & \\\text { Raw materials } & \$ 17,000 & \$ 19,000 \\\text { Work in process } & 9,000 & 14,000 \\\text { Finished goods } & 11,000 & 8,000 \\\text { Total } & \underline { \$ 37,000 } & \underline { \$ 41,000 }\end{array}$ In addition the following transactions occurred in 2017:
1. Raw materials purchased on account $75000.
2. Incurred factory labor $80000 all is direct labor. (Credit Factory Wages Payable).
3. Incurred the following overhead costs during the year: Utilities $6800 Depreciation on manufacturing machinery $8000 Manufacturing machinery repairs $9200 Factory insurance $9000 (Credit Accounts Payable and Accumulated Depreciation).
4. Assigned $80000 of factory labor to jobs.
5. Applied $36000 of overhead to jobs.
Instructions
(a) Journalize the above transactions.
(b) Reproduce the manufacturing cost and inventory accounts. Use T-accounts.
(c) From an analysis of the accounts compute the following:
1. Raw materials used.
2. Completed jobs transferred to finished goods.
3. Cost of goods sold.
4. Under- or overapplied overhead.

Question

The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31 2017:

$37,000‾$41,000‾\begin{array} { c r r } & \text { Beginning } & \text { Ending } \\\text { Inventories: } & & \\\text { Raw materials } & \$ 17,000 & \$ 19,000 \\\text { Work in process } & 9,000 & 14,000 \\\text { Finished goods } & 11,000 & 8,000 \\\text { Total } & \underline { \$ 37,000 } & \underline { \$ 41,000 }\end{array}

In addition the following transactions occurred in 2017:
1. Raw materials purchased on account $75000.
2. Incurred factory labor $80000 all is direct labor. (Credit Factory Wages Payable).
3. Incurred the following overhead costs during the year: Utilities $6800 Depreciation on manufacturing machinery $8000 Manufacturing machinery repairs $9200 Factory insurance $9000 (Credit Accounts Payable and Accumulated Depreciation).
4. Assigned $80000 of factory labor to jobs.
5. Applied $36000 of overhead to jobs.
Instructions
(a) Journalize the above transactions.
(b) Reproduce the manufacturing cost and inventory accounts. Use T-accounts.
(c) From an analysis of the accounts compute the following:
1. Raw materials used.
2. Completed jobs transferred to finished goods.
3. Cost of goods sold.
4. Under- or overapplied overhead.

Keshni Keshwan · Accepted Answer

Final Answer :

(c) 1. Raw materials used = $17000 + $75000 - $19000 = $73000.
2. Completed jobs transferred to finished goods = W/P debits
$9000 + $73000 + $116000 - $14000 = $184000.
3. Cost of goods sold = $11000 + $184000 - $8000 = $187000.
4. Overhead overapplied = $3000 (credit balance in Manufacturing Overhead).

Definitions

Learning Objectives

Learning Objectives

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