02.09.2019
 Essay about Inventory and Cost

rway

Froya Fabrikker A/S of Bergen, Norwegian, is a small company that makes specialty hefty equipment use with North Marine oil domains. (The Norwegian currency is the krone, which is denoted simply by Nkr. ) The company runs on the sob-order being system arid applies production overhead cost to jobs on the basis of direct labor-hours. At the outset of the year, the following estimates were created for the purpose of computing the predetermined overhead charge: manufacturing over head cost, Nkr360, 000; and direct labor-hours, 900. The next transactions took place during the year (all purchases and services had been acquired in account): a. Raw materials had been purchased for use in production, Nkr200, 000. b. Raw materials had been requisitioned use with production (all direct materials), Nkr185, 500. c. Bills were received, Nkr70, 500 (90% associated with factory procedures, and the remainder related to advertising and management activities). g. Salary and wage costs were received:

[pic]

at the. Maintenance costs were sustained in the stock, Nkr54, 000. f. Advertising and marketing costs had been incurred, Nkrl36, 000.

g. Depreciation was written for 12 months, Nkr95, 500 (80% related to factory tools, and the the rest related to selling and administrative equipment). l. Rental price incurred about buildings, Nkrl20, 000 (85% related to factory operations, plus the remainder relevant to selling and administrative facilities). i. Manufacturing overhead expense was placed on jobs, Nkr _? _. j. Cost of goods made for the season, Nkr770, 1000.

k. Revenue for 12 months (all about account) totaled Nkrl, two hundred, 000. These types of goods price Nkr800, 000 according to their job price sheets. The balances in the inventory accounts at the beginning of 12 months were: [pic]

Required:

1 ) Prepare record entries to record the preceding data.

2 . Content your items to T-accounts. (Don't miss to enter the beginning inventory bills above. ) Determine the ending bills in the products on hand accounts and the Production Overhead consideration. 3. Prepare a schedule of cost of products manufactured.

four. Prepare a log entry to close any equilibrium in the Developing Overhead accounts to Cost Goods Offered. Prepare a timetable of expense of goods offered.

5. Prepare an income assertion for the season.

6. Job 412 was one of the many jobs started and completed in the past year. The job needed Nkr8, 000 in direct materials and 39 hours of immediate labor period at an overall total direct labor cost of Nkr9, 200. The task contained just four products. If the business bills at a price 60% above the product product price on the job expense sheet, what price per product would have recently been charged to the customer?

SOLUTION:

1 .

|a. |Raw Materials |200, 000 | | | |Accounts Payable | |200, 000 | | | | | | |b. |Work in Process |185, 000 | | | |Raw Materials | |185, 000 | | | | | | |c. |Manufacturing Overhead |63, 000 | | | |Utilities Expense |7, 000 | | | |Accounts Payable | |70, 000 | | | | | | |d. |Work in Process...