Yordy Corporation Manufactures One Product

question 119

Essay

Yordy Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.There is no variable manufacturing overhead.The company's balance sheet at the beginning of the year was as follows:
The standard cost card for the company's only product is as follows:
The company calculated the following variances for the year:
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $220,500 and budgeted activity of 31,500 hours.
During the year,the company completed the following transactions:
a.Purchased 48,700 kilos of raw material at a price of $9.30 per kilo.
b.Used 43,020 kilos of the raw material to produce 30,800 units of work in process.
c.Assigned direct labor costs to work in process.The direct labor workers (who were paid in cash)worked 28,820 hours at an average cost of $20.20 per hour.
d.Applied fixed overhead to the 30,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed.Actual fixed overhead costs for the year were $208,600.Of this total,$124,600 related to items such as insurance,utilities,and indirect labor salaries that were all paid in cash and $84,000 related to depreciation of manufacturing equipment.
e.Transferred 30,800 units from work in process to finished goods.
f.Sold for cash 32,200 units to customers at a price of $46.60 per unit.
g.Completed and transferred the standard cost associated with the 32,200 units sold from finished goods to cost of goods sold.
h.Paid $155,000 of selling and administrative expenses.
i.Closed all standard cost variances to cost of goods sold.
Required:
1.Enter the beginning balances and record the above transactions in the worksheet that appears below.Because of the width of the worksheet,it is in two parts.In your text,these two parts would be joined side-by-side to make one very wide worksheet.

2.Determine the ending balance (e.g.,12/31 balance)in each account.
3.Prepare an income statement for the year.

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Definitions:

Credit Balances

Amounts of money in financial accounts that indicates the institution owes the account holder; in accounting, it can indicate a surplus in a particular account.

Ledger

A comprehensive collection of all accounts and transactions for a company, used in the double-entry bookkeeping system.

Overpayment Error

An overpayment error occurs when more money is paid than is actually owed, requiring adjustment or refund.

Wages Expense

This is the total amount of wages paid by a company to its employees for a specific period of time.