The Following Information Is Available for the Millennium Corporation for the Current

question 27

Essay

The following information is available for the Millennium Corporation for the current year:
Millennium Corporation uses a predetermined overhead rate of 150% of direct labor cost.Prepare journal entries for the following transactions and events:
(a)Purchase of raw materials on account.
(b)Assignment of materials costs to Goods in Process Inventory and Factory Overhead.
(c)Payment of Factory Payroll in cash.
(d)Assignment of Factory Payroll to Goods in Process Inventory and Factory Overhead.
(e)Recording of other factory overhead.Assume that all items other than depreciation are paid in cash.
(f)Assignment of Factory Overhead to Goods in Process Inventory.
(g)Transfer of goods completed to Finished Goods Inventory.
(h)Recording cost of goods sold.
(i)Assignment of over- or underapplied overhead to Cost of Goods Sold.

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Definitions:

Unit Sales

The total number of individual items or units that a company sells during a certain period.

Contribution Margin Ratio

The contribution margin ratio is the ratio of the contribution margin (sales minus variable costs) to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and provide profit.

Fixed Monthly Expenses

Costs that do not vary from month to month, such as rent, loan payments, and insurance premiums.

Contribution Format Income Statement

An income statement format that separates fixed and variable costs to highlight the contribution margin of a business.