Question: The following T-accounts represent September
The following T-accounts represent September activity for Kelly Tools:
Additional Data
∙ Sales are billed at 175 percent of Cost of Goods Sold before the over- or underapplied overhead is prorated.
∙ Materials of $75,700 were purchased during the month, and the balance in the Materials Inventory account increased by $5,300.
∙ Overhead is applied at the rate of 210 percent of direct materials cost.
∙ The balance in the Finished Goods Inventory account decreased by $19,100 during the month before any proration of under- or overapplied overhead.
∙ Total credits to the Wages Payable account amounted to $134,700 for direct and indirect labor.
∙ Factory depreciation totaled $32,100.
∙ Overhead was overapplied by $16,800. Overhead other than indirect labor, indirect materials, and depreciation incurred was $54,250, which required payment in cash. Overapplied overhead is to be allocated.
∙ The company has decided to allocate 12 percent of overapplied overhead to Work-in-Process Inventory, 23 percent to Finished Goods Inventory, and the balance to Cost of Goods Sold.
Balances shown in T-accounts are before any allocation.
Required
Complete the T-accounts.
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