Question

Eppich Corporation has provided the following data for the most recent month: Raw materials, beginning balance $ 20,500 Work in process, beginning balance $ 32,800 Finished Goods, beginning balance $ 50,800 Transactions: (1) Raw materials purchases $ 79,100 (2) Raw materials used in production (all direct materials) $ 77,900 (3) Direct labor $ 52,800 (4) Manufacturing overhead costs incurred $ 92,500 (5) Manufacturing overhead applied $ 72,800 (6) Cost of units completed and transferred from Work in Process to Finished Goods $ 190,000 (7) Any overapplied or underapplied manufacturing overhead is closed to Cost of Goods Sold ? (8) Finished goods are sold $ 221,700 Required: Complete the following T-accounts by recording the beginning balances and each of the transactions listed above.

Answer 1

Raw Materials T - Account

Debit :

Beginning Balance $ 20,500

Raw materials purchases $ 79,100

Total $99,600

Credit :

Raw materials used in production $ 77,900

Closing Balance $ 21,700

Total $99,600

Overheads T - Account

Debit :

Manufacturing overhead costs incurred $ 92,500

Totals $ 92,500

Credit :

Manufacturing overhead applied $ 72,800

Understatement of Overheads $ 19,700

Totals $ 92,500

Work In Process T - Account

Debit :

Beginning Work In Process $ 32,800

Raw materials $ 77,900

Direct Labor $ 52,800

Manufacturing overhead applied $ 72,800

Totals $236,300

Credit :

Transferred to Finished Goods $ 190,000

Ending Work In Process $46,300

Totals $236,300

Finished Goods T - Account

Debit :

Beginning Balance $ 50,800

Transferred from Work In Process $ 190,000

Totals $240,800

Credit :

Trading Account $ 221,700

Ending Balance $ 19,100

Totals $240,800

Cost of Goods Sold = $241,400

Step-by-step explanation:

Cost of Goods Sold = $ 221,700 + $ 19,700 (under-applied overheads)

= $241,400