During the First Month of the Current Accounting Period,Southern California

question 88

Essay

During the first month of the current accounting period,Southern California Company experienced a devastating loss due to a fire.Many of the accounting records were lost and the company is now trying to recreate the lost information.Fragments of data found include the following:
1.A portion of the budget indicates that the overhead rate was $10 per direct labor hour.
2.Job 74 was in process and had incurred $9,600 of direct materials and $14,000 of direct labor (1,000 hours).The company has a single hourly wage rate.
3.During the month,4,500 direct labor hours were worked.
4.Actual overhead costs were $48,000.No indirect materials were used.
5.The Materials Inventory account had a beginning balance of $28,000 and an ending balance of $18,000.
6.The Finished Goods Inventory account had a beginning balance of $12,000 and an ending balance of $26,000.
7.The Work in Process Inventory account had a beginning balance of $17,000.
8.The Cost of Goods Sold is $171,000.
Calculate the following amounts:
a.Ending work in process inventory account balance,Job No.74
b.Cost of goods completed
c.Amount of overhead under- or overapplied.
d.Direct materials used
e.Direct materials purchased

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Definitions:

Bankruptcy

A legal proceeding involving a person or business that is unable to repay their outstanding debts.

Chapter 11 Bankruptcy

A form of bankruptcy involving a reorganization of a debtor's business affairs, debts, and assets, often allowing the business to continue operating.

Reorganization Plan

A strategy employed by companies in financial distress to restructure their business operations, debts, and assets to regain financial stability.

Creditors

Individuals, financial institutions, or other entities that are owed money by a debtor, usually arising from financial agreements or contracts.