If current output is $40b less than Potential GDP, how much would congress need to decrease taxes by to correct this short-run e

Answer:

See below

Explanation:

1.

Actual manufacturing overhead costs incurred

$473,000

Subtract applied manufacturing overhead costs $25 × 19,400

($485,000)

Over-applied overhead

$12,000

2.

Beginning raw materials

$20,000

Plus raw materials purchased

$400,000

Raw materials available for use

$420,000

Minus ending raw materials

($30,000)

Raw materials utilized in production

$390,000

Less indirect materials

($15,000)

Add direct labor costs

$60,000

Add applied manufacturing overhead

$485,000

Total manufacturing costs

$920,000

Add beginning work in process inventory

$40,000

Total work in process inventory

$960,000

Less ending work in process

($70,000)

Cost of goods manufactured.

$890,000

Answer:

$664,000

Explanation:

Below is the calculation for the budgeted total manufacturing expense:

The total budgeted manufacturing costs can be calculated as

= Fixed costs + Variable costs

= $24,000 + ($16 × 40,000 linear feet of block)

= $24,000 + $640,000

= $664,000

This total is derived by simply adding the fixed and variable expenses so we arrive at the overall budgeted manufacturing cost.

Answer:

a. Nov 11, 2017

Dr Cash $4,900

Cr Sales $4,900

Nov 30, 2017

Dr Warranty Expense $294

Cr Estimated Warranty Liabilities $294

Dec 9, 2017

Dr Estimated Warranty Liabilities $196

Cr Cash $196

Dec 16, 2017

Dr Cash $14,700

Cr Sales $14,700

Dec 29, 2017

Dr Estimated Warranty Liabilities $392

Cr Cash $392

Dec 31, 2017

Dr Warranty Expense $882

Cr Estimated Warranty Liabilities $882

b. Jan 5, 2018

Dr Cash $9,800

Cr Sales $9,800

Jan 17, 2018

Dr Estimated Warranty Liabilities $462

Cr Cash $462

Dec 31, 2018

Dr Warranty Expense $588

Cr Cash $588

Explanation:

a. Preparation of the journal entries to record the transactions and adjustments for 2017

Nov 11, 2017

Dr Cash $4,900

Cr Sales $4,900

(This records the sale of razors for cash)

Nov 30, 2017

Dr Warranty Expense $294

Cr Estimated Warranty Liabilities $294

($4,900*6%)

(This records the warranty expense)

Dec 9, 2017

Dr Estimated Warranty Liabilities $196

Cr Cash $196

(14 razors*14)

(This represents the replacement of 14 razors)

Dec 16, 2017

Dr Cash $14,700

Cr Sales $14,700

(This records the cash sale of razors)

Dec 29, 2017

Dr Estimated Warranty Liabilities $392

Cr Cash $392

(28 razors*14)

(This represents the replacement of 28 razors)

Dec 31, 2017

Dr Warranty Expense $882

Cr Estimated Warranty Liabilities $882

($14,700*6%)

(This records warranty expense)

b. Preparation of journal entries to reflect the transactions and adjustments for 2018

Jan 5, 2018

Dr Cash $9,800

Cr Sales $9,800

(This records razors sold for cash)

Jan 17, 2018

Dr Estimated Warranty Liabilities $462

Cr Cash $462

(33 razors*14)

(This indicates the replacement of 33 razors)

Dec 31, 2018

Dr Warranty Expense $588

Cr Cash

(6%*$9,800) $588

(This indicates the recording of warranty expense)