Cost to Process Purchase Orders by zqg15723


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									                                               Student Name:
                                                                Problem 03-06

                            AUCTON CORPORATION
                           Computation of Activity Rates

                                                    Estimated   Expected Activity
                 Activity Cost Pool                 OH Cost      Activity Rate
Purchase orders
Parts management
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
           Cost of Goods Sold
            Finished Goods
                                           Student Name:
                                                            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

     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

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

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