Balance Sheet and Factory Overhead
Chrome-It, Inc., manufactures special chromed parts made to the order and specifications of the customer. It has two production departments, stamping and plating, and two service departments, power and maintenance. In any production department, the job in process is wholly completed before the next job is started. The company operates on a fiscal year, which ends September 30. Following is the post-closing trial balance as of September 30:
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Additional information:
1. The balance of the materials account represents the following:
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The company uses the FIFO method of accounting for all inventories. Material A is used in the stamping department, and materials B and C are used in the plating department.
2. The balance of the work in process account represents the following costs that are applicable to Job 905. (The customer’s order is for 1,000 units of the finished product.)
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,500
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
Factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900 $3,600
3. The finished goods account reflects the cost of Job 803, which was finished at the end of the preceding month and is awaiting delivery orders from the customer.
4. At the beginning of the year, factory overhead application rates were based on the following data:
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In October, the following transactions were recorded: a. Purchased the following materials and supplies on account: Material A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100 units@ $26 Material B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900 units@ $17 Material C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[pic]
.:.
Additional information:
1. The balance of the materials account represents the following:
[pic]
.:.
The company uses the FIFO method of accounting for all inventories. Material A is used in the stamping department, and materials B and C are used in the plating department.
2. The balance of the work in process account represents the following costs that are applicable to Job 905. (The customer’s order is for 1,000 units of the finished product.)
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,500
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
Factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900 $3,600
3. The finished goods account reflects the cost of Job 803, which was finished at the end of the preceding month and is awaiting delivery orders from the customer.
4. At the beginning of the year, factory overhead application rates were based on the following data:
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.:.
In October, the following transactions were recorded: a. Purchased the following materials and supplies on account: Material A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100 units@ $26 Material B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900 units@ $17 Material C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .