"Cost to Process Purchase Orders"
Student Name: Class: Problem 03-06 AUCTON CORPORATION Computation of Activity Rates Estimated Expected Activity Activity Cost Pool OH Cost Activity Rate Machining Purchase orders Parts management Testing General factory AUCTON CORPORATION General Journal Date Account Title Debit Credit a. Raw Materials Accounts Payable b. Work in Process Manufacturing Overhead Raw Materials c. Work in Process Manufacturing Overhead Sales Commissions Expense Administrative Salaries Expense Salaries and Wages Payable d. Sales Travel Expense Accounts Payable e. Manufacturing Overhead Accounts Payable f. Advertising Expense Accounts Payable g. Manufacturing Overhead Depreciation Expense Accumulated Depreciation h. Work in Process Manufacturing Overhead I. Finished Goods Work in Process j. Accounts Receivable Sales Cost of Goods Sold Finished Goods Student Name: Class: Problem 03-06 4. Underapplied or overapplied overhead: Actual overhead incurred Overhead applied Overhead overapplied General Journal Account Title Debit Credit Manufacturing Overhead Cost of Goods Sold 5. AUCTON CORPORATION Income Statement Sales Less cost of goods sold Gross margin Less selling and administrative expenses: Sales commissions expense Administrative salaries expense Sales travel expense Advertising expense Depreciation expense Net income Given Data P03-06: AUCTON CORPORATION Activity Activity Estimated Expected Cost Pool Measure OH Cost Activity Machining Machine-hours $180,000 1,000 Purchase orders Number of orders 90,000 600 Parts management Number of parts types 60,000 300 Testing Number of tests 150,000 250 General factory Direct labor-hours 280,000 20,000 Inventory balances: Raw materials $7,000 Work in process 6,000 Finished goods 10,000 Transactions: a. Raw materials purchased $595,000 b. Raw materials withdrawn for use 600,000 Direct 560,000 Indirect 40,000 c. Costs for employee services: Direct labor 90,000 Indirect labor 300,000 Sales commissions 85,000 Administrative salaries 245,000 d. Sales travel costs 38,000 e. Various factory overhead costs 237,000 f. Advertising costs 190,000 g. Depreciation 270,000 Factory operations 210,000 Selling and administrative activities 60,000 h. Manufacturing overhead: Activity Actual Cost Pool Activity Machining 1,050 MHs Purchase orders 580 orders Parts management 330 part types Testing 265 tests General factory 21,000 DLHs I. Cost to manufacture finished goods $1,450,000 j. Sales 2,100,000 Cost to manufacture goods sold 1,400,000 Check figure: Total overhead overapplied $8,000