The Following Inventory Information Is Available for Ricci Manufacturing Corporation

question 14

Essay

The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31, 2010:
In addition, the following transactions occurred in 2010:
1. Raw materials purchased on account, $75,000.
2. Incurred factory labor, $90,000, all is direct labor. (Credit Factory Wages Payable).
3. Incurred the following overhead costs during the year: Utilities $6,800, Depreciation on manufacturing machinery $8,000, Manufacturing machinery repairs $9,200, Factory insurance $9,000 (Credit Accounts Payable and Accumulated Depreciation).
4. Assigned $90,000 of factory labor to jobs.
5. Applied $36,000 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.

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Definitions:

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