ACC-1B Lecture Notes - Lecture 11: European Cooperation In Science And Technology, Deutsche Luft Hansa, Finished Good

7 views2 pages

lemonwasp425

7 Aug 2020

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Record the flow of cost in job order costing: Raw materials inventory- represents the cost of materials purchased from suppliers but not yet used in production. This account includes both direct materials that will be traced to specific jobs and the indirect materials that cannot be traced to specific jobs. Work in process inventory- represents the total cost of jobs that are in process at any given point in time. Any cost that is added to the work in process inventory account must also be recorded on an individual job cost sheet. The job cost sheet serves as a subsidiary ledger to the work in. Tus the total cost of all jobs in process should equal the balance in. Finished goods inventory- represents the cost of jobs that have been completed but not yet sold. The cost of a completed job remains in finished goods inventory until it is sold.

Exercise 15-5 Manufacturing cost flows LO P1, P2, P3

Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $8,900, direct labor of $3,400, and applied overhead of $2,890. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $26,000, Job 121 is started and completed, and Job 122 is started and still in process at the end of the month. Custom Cabinetry incurs the following costs during July.

July Product Costs	Job 120		Job 121		Job 122		Total
Direct materials	$	1,600	$	8,600	$	2,600	$	12,800
Direct labor		2,900		4,800		3,400		11,100
Overhead applied		?		?		?		?

1. Prepare journal entries for the following in July.

Direct materials used in production.
Direct labor used in production.
Overhead applied.
The sale of Job 120.
Cost of goods sold for Job 120.

2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory general ledger accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30.)

	Work in Process	Finished Goods
Job #
Direct materials
Direct labor
Overhead
Total cost

grayskunk84

Christopherâs Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2016 follow: Raw Materials Inventory $ 15,700 Work in Process Inventory 6,100 Finished Goods Inventory 22,000 The following transactions occurred during January: (a) Purchased materials on account for $26,100. (b) Issued materials to production totaling $20,800, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $17,300 were recorded as follows: $10,100 for assembly workers 1,300 for factory supervision 2,900 for administrative personnel 3,000 for sales commissions (d) Recorded depreciation: $4,700 for machines, $700 for the copier used in the administrative office. (e) Recorded $1,400 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Paid $5,600 in other factory costs in cash. (g) Applied manufacturing overhead at a rate of 200 percent of direct labor cost. (h) Completed all jobs but one; the job cost sheet for this job shows $2,300 for direct materials, $2,200 for direct labor, and $4,400 for applied overhead. (i) Sold jobs costing $50,900. The revenue earned on these jobs was $66,170. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: (Post all amounts separately. Do not combine/add any dollar amounts when posting to the t-accounts.) Raw Materials Inventory. Work in Process Inventory. Finished Goods Inventory. Cost of Goods Sold. Selling, General, and Administrative Expenses. Sales Revenue. Other accounts (Cash, Payables, etc.). 2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. 3. Determine the amount of over- or underapplied overhead. 4. Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold.

indigotiger304

Required information

[The following information applies to the questionsdisplayed below.]

Widmer Watercraftâs predetermined overhead rate for the year 2017is 200% of direct labor. Information on the companyâs productionactivities during May 2017 follows.

Purchased raw materials on credit, $220,000.

Materials requisitions record use of the following materials forthe month.


Job 136	$	49,000
Job 137		33,500
Job 138		20,200
Job 139		22,800
Job 140		7,000
Total direct materials		132,500
Indirect materials		21,000
Total materials used	$	153,500

Paid $15,750 cash to a computer consultant to reprogram factoryequipment.

Time tickets record use of the following labor for the month.These wages were paid in cash.


Job 136	$	12,100
Job 137		10,700
Job 138		37,900
Job 139		39,600
Job 140		3,200
Total direct labor		103,500
Indirect labor		25,500
Total	$	129,000

Applied overhead to Jobs 136, 138, and 139.

Transferred Jobs 136, 138, and 139 to Finished Goods.

Sold Jobs 136 and 138 on credit at a total price of$545,000.

The company incurred the following overhead costs during themonth (credit Prepaid Insurance for expired factory insurance).


Depreciation of factorybuilding	$	70,000
Depreciation of factoryequipment		38,000
Expired factory insurance		11,000
Accrued property taxespayable		35,500

Applied overhead at month-end to the Work in Process Inventoryaccount (Jobs 137 and 140) using the predetermined overhead rate of200% of direct labor cost.

4. Prepare a report showing the total cost ofeach job in process and prove that the sum of their costs equalsthe Work in Process Inventory account balance. Prepare similarreports for Finished Goods Inventory and Cost of Goods Sold.

Report of Job Costs
Work inProcess Inventory
Job 137
Job 140

Balance	0
FinishedGoods Inventory
Job 139

Balance	0
Cost ofGoods Sold
Job 136
Job 138

Balance	$0

coffeecod988

ACC-1B Lecture Notes - Lecture 11: European Cooperation In Science And Technology, Deutsche Luft Hansa, Finished Good

Document Summary

Get access

Related Documents

ACC-1B Lecture Notes - Lecture 12: European Cooperation In Science And Technology, Finished Good, Cost Driver

ACC-1B Lecture Notes - Lecture 7: Income Statement, Finished Good, Management Accounting

ACC-1B Lecture Notes - Lecture 1: Operations Management, Financial Accounting

Related Questions

Exercise 15-5 Manufacturing cost flows LO P1, P2, P3