The Following Account Balances at the Beginning of January Were

question 211

Essay

The following account balances at the beginning of January were selected from the general ledger of Logan Industries:
Work in process inventory $0
Raw materials inventory $29,500
Finished goods inventory $51,200
Additional data:
1)Actual manufacturing overhead for January amounted to $78,200.
2)Total direct labor cost for January was $72,000; actual direct labor hours for January were 3,600.
3)The predetermined manufacturing overhead rate is based on direct labor hours.The budget for the year called for $325,000 of direct labor cost and $410,400 of manufacturing overhead costs.Estimated direct labor hours for the year were expected to be 15,200.
4)The only job unfinished on January 31 was Job No.619,for which total direct labor charges were $18,000 (900 direct labor hours)and total direct material charges were $15,700.
5)Cost of direct materials placed in production during January totaled $125,000.There were no indirect material requisitions during January.
6)January 31 balance in raw materials inventory was $32,000.
7)Finished goods inventory balance on January 31 was $42,300.
Required:
a)Determine the predetermined manufacturing overhead rate.
b)Determine the amount of materials purchased during January.
c)Determine cost of goods manufactured for January.
d)Determine the work in process inventory balance on January 31.
e)Determine cost of goods sold for January.
f)Determine whether manufacturing overhead is overallocated or underallocated and by what amount at Jan.31.

Recognize the motivational aspects of various compensation and incentive plans.

Identify the benefits and drawbacks of employee stock plans and profit-sharing plans.

Explain the importance and impact of merit pay and performance appraisal systems.

Distinguish between individual- and group-level pay performance systems.

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Definitions:

Balanced Scorecard

A strategic planning and management system used to align business activities with the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

Performance Measurement

The process of evaluating how effectively and efficiently an organization or individual achieves its objectives.

Operating Assets

Assets used in the day-to-day operations of a business to generate revenue, excluding investments and non-operational assets.

Net Operating Income

The profit a company generates from its core business operations, excluding taxes and interest.