Ferrini Corporation Manufactures One Product

question 91

Essay

Ferrini 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 standard cost card for the company's only product is as follows:
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $82,500 and budgeted activity of 7,500 hours.
During the year,the company completed the following transactions:
a.Purchased 57,700 pounds of raw material at a price of $8.50 per pound.
b.Used 52,750 pounds of the raw material to produce 19,500 units of work in process.
c.Assigned direct labor costs to work in process.The direct labor workers (who were paid in cash)worked 9,950 hours at an average cost of $20.70 per hour.
d.Applied fixed overhead to the 19,500 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 $97,100.Of this total,-$12,900 related to items such as insurance,utilities,and indirect labor salaries that were all paid in cash and $110,000 related to depreciation of manufacturing equipment.
e.Transferred 19,500 units from work in process to finished goods.
f.Sold for cash 20,200 units to customers at a price of $44.20 per unit.
g.Completed and transferred the standard cost associated with the 20,200 units sold from finished goods to cost of goods sold.
h.Paid $61,000 of selling and administrative expenses.
i.Closed all standard cost variances to cost of goods sold.
Required:
1.Compute all direct materials,direct labor,and fixed overhead variances for the year.
2.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.The beginning balances have been provided for each of the accounts,including the Property,Plant,and Equipment (net)account which is abbreviated as PP&E (net).

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

---

Definitions:

Phototherapy

A treatment method that involves the use of light to treat certain medical conditions.

Schizophrenia

A serious mental disorder characterized by disturbances in thought, perception, emotions, language, sense of self, and behavior, often resulting in hallucinations, delusions, and cognitive difficulties.

Bipolar Disorder

A mental health condition characterized by extreme mood swings that include emotional highs (manias) and lows (depressions).

Cognitive-behavioral Therapy

Cognitive-behavioral Therapy is a form of psychotherapy that treats problems by modifying dysfunctional behaviors, thoughts, and emotions.