For the year ended December 31, 2017, the job cost sheets of Cinta Company conta

Question

For the year ended December 31, 2017, the job cost sheets of Cinta Company contained the following data.

Job
Number

Explanation

Direct
Materials

Direct
Labor

Manufacturing
Overhead

Total
Costs

Other data:

Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold. (Credit and Debits) Only 2

Account Titles and Explanation   

Debit

Credit

Determine the gross profit to be reported for 2017.

Job
Number

Explanation

Direct
Materials

Direct
Labor

Manufacturing
Overhead

Total
Costs

7640 Balance 1/1 $28,000 $26,880 $32,256 $87,136 Current year’s costs 33,600 40,320 48,384 122,304 7641 Balance 1/1 12,320 20,160 24,192 56,672 Current year’s costs 48,160 53,760 64,512 166,432 7642 Current year’s costs 64,960 61,600 73,920 200,480

Explanation / Answer

1) Manufacturing overhead applied in current year: 48384+64512+73920=186816 Actual Manufacturing overhead incurred = 134400+15680+20160+8960=179200 Over-applied manufacturing overhead = 186816 - 179200 =7616 Journal Entry: Debit Manufacturing overhead $7,616 Credit COGS $7,616 2) Gross Profit = Sales - COGS job Sales COGS Gross Profit 7638 97440 7639 103040 7641    223104    (56672+166432) 593600 423584 $170016

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