Southwest company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $248,000 of manufacturing overhead for an estimated allocation base of $155,000 direct materials dollars. The following transactions took place during the year (all purchases and services were acquired on account):
Raw Materials purchased, $242,000
Raw materials requisitioned for use in production (all direct materials), $150,000
Utility bills incurred in the factory, $21,000
Costs for salaries and wages were incurred as follows:
Direct labor $216,000
Indirect Labor $90,000
Selling and administrative salaries $145,000
Maintenance cost incurred in the factory $15,000
Advertising costs incurred $130,000
Depreciation recorded for the year, $50,000 (90% relates to factory assets, and the remainder relates to selling and administrative assets).
Rental costs incurred on building, $90,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration).
Miscellaneous selling and administrative costs incurred, $17,000
Manufacturing overhead costs was applied to jobs, $?????
Costs of goods manufactured for the year, $????
Sales for the year (all on account) totaled $1,000,000. These goods costs $600,000 according to their job costs sheet.
The balances in the inventory accounts at the beginning of the year were follows:
Raw Materials $18,000
Work in process $24,000
Finished Goods $35,000
Required:
Prepare a schedule of costs of goods manufactured.
Prepare a journal entry to close any balance in the Manufacturing Overhead account to Costs of Good Sold.
Prepare a schedule of costs of goods sold
Prepare an income statement for the year