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21. Everspring, Inc. has the following data for 2018. its first year of operations (this means...

Question:

21. Everspring, Inc. has the following data for 2018. its first year of operations (this means all accounts had $0 beginning

21. Everspring, Inc. has the following data for 2018. its first year of operations (this means all accounts had $0 beginning balances). Any over/under-applied overhead is closed out proportionately to the applicable accounts. Actual overhead $15,000 Cost of goods manufactured (unadjusted) $30,000 Cost of goods sold (unadjusted) $15,000 Predetermined overhead rate $50 per direct labor hour Direct labor hours used 200 Direct labor rate $100 per hour Raw materials purchased $55,000 Raw materials used ($30,000 direct, $10,000 indirect) $40,000 What amount would be shown as "Inventory" on the Balance Sheet at the end of the year?

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Ever Spring Inc. Amount $
Calculation of Overhead under applied Note
Labor hours used           200.00 A
Predetermined OH rate             50.00 B
Overhead applied     10,000.00 C=A*B
Actual Overhead      15,000.00 D
Overhead under applied        5,000.00 E=D-C
Calculation of finished goods inventory
Cost of goods manufactured      30,000.00
Less: Cost of goods sold      15,000.00
Finished goods inventory     15,000.00 F
Calculation of direct labor costs
Labor hours used           200.00 See A
Labor hour rate           100.00 G
Direct labor costs     20,000.00 H=A*G
Calculation of total manufacturing costs
Direct materials used      30,000.00
Direct labor costs      20,000.00
Overhead applied      10,000.00
Total manufacturing costs     60,000.00 I
Calculation of WIP inventory
Total manufacturing costs      60,000.00 See I
Less: Cost of goods manufactured      30,000.00
WIP inventory     30,000.00 J
If under applied overhead is closed in the ratio of WIP, finished goods and cost of good sold.
WIP Finished goods Cost of good sold Total
Amount      30,000.00 15,000.00 15,000.00 60,000.00 K. See workings above.
% of allocation 50.00% 25.00% 25.00% 100.00% L
Under applied overhead        2,500.00      1,250.00      1,250.00     5,000.00 M=K*L.

This is $ 5,000* % of allocation.

Adjusted Value     32,500.00 16,250.00 16,250.00 N=K+M
Calculation of raw materials inventory Amount $ Note
Raw materials purchased      55,000.00
Less: Raw materials used      40,000.00
Raw materials inventory     15,000.00 O
Amount to be shown as inventory in Balance Sheet Amount $
Raw materials      15,000.00 See O
WIP      32,500.00 See N
Finished goods      16,250.00 See N
Inventory     63,750.00
.

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