Jensen Manufacturing Company makes specialty tools. In January Jensen incurs manufacturing costs of $13000000 for direct materials direct labor and overhead. 20% of the total costs represents overhead applied. The overhead rate is $1 for every $2 of direct labor costs incurred. Inventory balances were: $$\begin{array} { l r r }
& \underline { \text { January 1 } } & \underline { \text { January 31 } } \
\text { Raw materials } &\$ 300,000 &\$ 500,000 \
\text { Work in process } & 600,000 & 400,000 \
\text { Finished goods } & 400,000 & 200,000
\end{array}$$ At the end of January there was $1000 of overapplied overhead.
Instructions
(a) Determine the cost of raw materials purchased in January.
(b) Prepare a cost of goods manufactured schedule for January 2017.
(c) Compute the cost of goods sold for January.

Question

Jensen Manufacturing Company makes specialty tools. In January Jensen incurs manufacturing costs of $13000000 for direct materials direct labor and overhead. 20% of the total costs represents overhead applied. The overhead rate is $1 for every $2 of direct labor costs incurred. Inventory balances were: $$\begin{array} { l r r } 
& \underline { \text { January 1 } } & \underline { \text { January 31 } }  \
\text { Raw materials } &\$ 300,000 &\$ 500,000 \
\text { Work in process } & 600,000 & 400,000 \
\text { Finished goods } & 400,000 & 200,000
\end{array}$$ At the end of January there was $1000 of overapplied overhead.
Instructions
(a) Determine the cost of raw materials purchased in January.
(b) Prepare a cost of goods manufactured schedule for January 2017.
(c) Compute the cost of goods sold for January.

Quizplus · Accepted Answer

The Answer of Jensen Manufacturing Company makes specialty tools. In January Jensen incurs manufacturing costs of $13000000 for direct materials direct labor and overhead. 20% of the total costs represents overhead applied. The overhead rate is $1 for every $2 of direct labor costs incurred. Inventory balances were: $$\begin{array} { l r r } 
& \underline { \text { January 1 } } & \underline { \text { January 31 } }  \
\text { Raw materials } &\$ 300,000 &\$ 500,000 \
\text { Work in process } & 600,000 & 400,000 \
\text { Finished goods } & 400,000 & 200,000
\end{array}$$ At the end of January there was $1000 of overapplied overhead.
Instructions
(a) Determine the cost of raw materials purchased in January.
(b) Prepare a cost of goods manufactured schedule for January 2017.
(c) Compute the cost of goods sold for January.

Jensen Manufacturing Company Makes Specialty Tools At the End of January There Was $1000 of Overapplied