Answered

Westonci.ca offers fast, accurate answers to your questions. Join our community and get the insights you need now. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

Bennington Company applies manufacturing overhead by using a predetermined rate of 150% of direct labor cost. The data that follow pertain to job no. 831:
Direct material cost$72,000 Direct labor cost 38,000 If Bennington adds a 30% markup on total cost to generate a profit, which of the following choices depicts a portion of the accounting needed to record the credit sale of job no. 831?
A) Accounts Recievable 167,000
B) Accounts Recievable 217,100
C) Finnished Goods Inventory 167,000
D) Finnished Goods Inventory 217,100
E) Sales Revenue 217,100
And why?

Sagot :

Answer: Accounts Recievable 217,100

Explanation:

The following information can be gotten from the question:

Direct material cost = $72,000

Direct labor cost = $38,000

Predetermined rate = 150%

The manufacturing overhead appiled will be calculated as:

= $38,000 x 150%

= $38000 × 1.5

= $57,000

Therefore, the total cost incurred will be calculated as:

= $72,000 + $38,000 + $57,000

= $167,000

The total cost is being markup at 30% and this will be:

= $167,000 x 30%

= $167000 × 0.3

= $50,100

Therefore, the selling price will then be:

= $167,000 + $50,100

= $217,100

Therefore, the accounting needed to record the credit sale of job no. 831 will be:

Debit: Accounts receivable $217,100

Credit: Sales $217,100

The correct option is:

B. Accounts Recievable 217,100

We appreciate your time. Please come back anytime for the latest information and answers to your questions. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.