Question

"Marshall Enterprises charged the following amounts of overhead to jobs during the year: $20,000 to jobs still in process, $60,000 to jobs completed but not sold, and $120,000 to jobs finished and sold. At year-end, Marshall Enterprise's Factory Overhead account has a credit balance of $5,000, which is not a material amount. What entry should Marshall make at year-end?"

Answer 1

The firm's accounting profit is $50,000.

Step-by-step explanation:

To determine the firm's accounting profit, we need to subtract the explicit costs from the total revenues. In this case, the total revenues are $1 million, and the explicit costs include labor ($600,000), capital ($150,000), and materials ($200,000). Accounting profit = total revenues - explicit costs = $1,000,000 - ($600,000 + $150,000 + $200,000) = $50,000.

Answer 2

Given that,

Jobs still in process = $20,000

Jobs completed but not sold = $60,000

Jobs finished and sold = $120,000

Marshall Enterprise's Factory Overhead account has a credit balance of $5,000

Therefore, the journal entry is as follows:

Factory overhead A/c Dr. $5,000

To Cost of goods sold A/c $5,000

(To record the cost of goods sold)