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Quark Spy Equipment manufactures espionage equipment. Quark usesa job-order costing system and applies overhead to jobs on thebasis of direct labor-hours. For the current year, Quark estimatedthat it would work 176,000 direct labor-hours and incur $52,448,000of manufacturing overhead cost. The following summarizedinformation relates to January of the current year. The rawmaterials purchased include both direct and indirect materials.

Rawmaterials purchased on account $ 3,702,400
Direct materialsrequisitioned into production $ 3,408,800
Indirect materialsrequisitioned into production $ 258,500
Direct labor cost(20,600 hours @ $36 per hour) $ 741,600
Indirect labor cost(24,300 hours @ $24 per hour) $ 583,200
Depreciation on thefactory building $ 680,800
Depreciation on thefactory equipment $ 3,183,100
Utilities for thefactory $ 286,300
Cost of jobsfinished $ 8,972,900
Cost of jobs sold $ 8,563,300
Sales (all onaccount) $ 12,846,700
Required:

Prepare journal entries to record Quark's transactions for themonth of January. Do not close out the manufacturing overheadaccount. (Omit $ sign in your response.)

GeneralJournal Debit Credit
a. (Click to select)RawmaterialsAccounts payableWork in processManufacturingoverheadSalaries and wages payableAccumulated depreciation,buildingAccumulated depreciation, equipment
(Click to select)Raw materialsAccounts payableWork inprocessManufacturing overheadSalaries and wages payableFinishedgoodsCost of goods sold
b. (Click to select)RawmaterialsAccounts payableWork in processManufacturingoverheadSalaries and wages payableFinished goodsCost of goodssold
(Click to select)Raw materialsAccounts payableWork inprocessManufacturing overheadSalaries and wages payableFinishedgoodsCost of goods sold
c. (Click to select)RawmaterialsAccounts payableWork in processManufacturingoverheadSalaries and wages payableFinished goodsCost of goodssold
(Click to select)Raw materialsAccounts payableWork inprocessManufacturing overheadSalaries and wages payableFinishedgoodsCost of goods sold
d. (Click to select)RawmaterialsAccounts payableWork in processManufacturingoverheadSalaries and wages payableFinished goodsCost of goodssold
(Click to select)Raw materialsAccounts payableWork inprocessManufacturing overheadSalaries and wages payableFinishedgoodsCost of goods sold
e. (Click to select)AccountsreceivableCost of goods soldFinished goodsSalaries and wagespayableManufacturing overheadWork in processAccounts payable
(Click to select)Raw materialsAccounts payableWork inprocessManufacturing overheadSalaries and wages payableAccountsreceivableFinished goods
f. (Click to select)RawmaterialsAccounts payableWork in processManufacturingoverheadSalaries and wages payableCost of goods soldAccountsreceivable
(Click to select)Raw materialsAccounts payableSalariesand wages payableWork in processManufacturing overheadFinishedgoodsAccounts receivable
g. (Click to select)RawmaterialsAccounts payableWork in processManufacturingoverheadAccumulated depreciation, buildingAccumulated depreciation,equipmentCost of goods sold
(Click to select)Accumulated depreciation,buildingFinished goodsManufacturing overheadWork in processSalariesand wages payableAccumulated depreciation, equipmentUtilitiespayable (or cash)
(Click to select)Salaries and wages payableFinishedgoodsAccumulated depreciation, buildingAccumulated depreciation,equipmentUtilities payable (or cash)Work in processManufacturingoverhead
(Click to select)Work in processUtilities payable (orcash)Accumulated depreciation, buildingSalaries and wagespayableAccumulated depreciation, equipmentFinishedgoodsManufacturing overhead
h. (Click to select)RawmaterialsAccounts payableWork in processFinished goodsAccumulateddepreciation, buildingAccumulated depreciation, equipmentAccountsreceivable
(Click to select)Raw materialsAccounts payableWork inprocessManufacturing overheadSalaries and wages payableFinishedgoodsCost of goods sold
i. (Click to select)RawmaterialsAccounts payableWork in processFinished goodsManufacturingoverheadSalaries and wages payableCost of goods sold
(Click to select)Raw materialsAccounts payableFinishedgoodsManufacturing overheadSalaries and wages payableAccumulateddepreciation, buildingAccumulated depreciation, equipment
j. (Click to select)AccountsreceivableAccumulated depreciation, buildingAccumulateddepreciation, equipmentCost of goods soldFinished goodsSalaries andwages payableManufacturing overhead
(Click to select)Raw materialsAccounts payableSalesWorkin processManufacturing overheadAccounts receivableCost of goodssold

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Tod Thiel
Tod ThielLv2
28 Sep 2019

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Dillon Products manufactures various machined parts to customerspecifications. The company uses a job-order costing system andapplies overhead costs to jobs on the basis of machine-hours. Atthe beginning of the year, the company used a cost formula toestimate that it would incur $4,327,500 in manufacturing overheadcost at an activity level of 577,000 machine-hours.

The company spent the entiremonth of January working on a large order for 9,000 custom mademachined parts. The company had no work in process at the beginningof January. Cost data relating to January follow:

a. Raw materials purchased onaccount, $317,000.
b. Raw materials requisitioned forproduction, $262,000 (80% direct and 20% indirect).
c. Labor cost incurred in thefactory, $153,000, of which $51,000 was direct labor and $102,000was indirect labor.
d. Depreciation recorded on factoryequipment, $63,600.
e. Other manufacturing overheadcosts incurred, $85,500 (credit Accounts Payable).
f.

Manufacturing overhead cost was applied to production on thebasis of 40,640 machine-hours actually worked during the month.
g.

The completed job was moved into the finished goods warehouse onJanuary 31 to await delivery to the customer. (In computing thedollar amount for this entry, remember that the cost of a completedjob consists of direct materials, direct labor, andapplied overhead.)

Required:
1.

Prepare journal entries to record items (a) through (f) above.[Ignore item (g) for the moment.] (If no entry is requiredfor a transaction/event, select "No journal entry required" in thefirst account field. Do not round intermediatecalculations.)

2.

Prepare T-accounts for Manufacturing Overhead and Work inProcess. Post the relevant items from your journal entries to theseT-accounts. (Do not round intermediatecalculations.)

3. Prepare a journal entry for item(g) above. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field. Do not round intermediatecalculations.)

4.

Compute the unit product cost that will appear on the job costsheet. (Do not round intermediate calculations. Round youranswer to 2 decimal places.)

The following cost data relate to the manufacturing activitiesof Chang Company during the just completed year: Manufacturingoverhead costs incurred: Indirect materials $ 16,100 Indirect labor141,000 Property taxes, factory 9,100 Utilities, factory 81,000Depreciation, factory 149,700 Insurance, factory 11,100 Totalactual manufacturing overhead costs incurred $ 408,000 Other costsincurred: Purchases of raw materials (both direct and indirect) $411,000 Direct labor cost $ 71,000 Inventories: Raw materials,beginning $ 21,100 Raw materials, ending $ 31,100 Work in process,beginning $ 41,100 Work in process, ending $ 71,100 The companyuses a predetermined overhead rate of $20 per machine-hour to applyoverhead cost to jobs. A total of 20,800 machine-hours were usedduring the year. Required: 1. Compute the amount of underapplied oroverapplied overhead cost for the year. 2. Prepare a schedule ofcost of goods manufactured for the year.

Dillon Products manufactures various machined parts to customerspecifications. The company uses a job-order costing system andapplies overhead cost to jobs on the basis of machine-hours. At thebeginning of the year, the company used a cost formula to estimatethat it would incur $4,305,000 in manufacturing overhead cost at anactivity level of 574,000 machine-hours.

The company spent the entire month of January working on a largeorder for 12,500 custom-made machined parts. The company had nowork in process at the beginning of January. Cost data relating toJanuary follow:

Raw materials purchased on account, $313,000.

Raw materials used in production, $264,000 (80% direct materialsand 20% indirect materials).

Labor cost accrued in the factory, $171,000 (one-third directlabor and two-thirds indirect labor).

Depreciation recorded on factory equipment, $63,600.

Other manufacturing overhead costs incurred on account,$86,000.

Manufacturing overhead cost was applied to production on thebasis of 40,630 machine-hours actually worked during the month.

The completed job for 12,500 custom-made machined parts wasmoved into the finished goods warehouse on January 31 to awaitdelivery to the customer. (In computing the dollar amount for thisentry, remember that the cost of a completed job consists of directmaterials, direct labor, and applied overhead.)

Required:

1. Prepare journal entries to record items (a) through (f) above[ignore item (g) for the moment].

2. Prepare T-accounts for Manufacturing Overhead and Work inProcess. Post the relevant items from your journal entries to theseT-accounts.

3. Prepare a journal entry for item (g) above.

4. If 10,500 of the custom-made machined parts are shipped tothe customer in February, how much of this job’s cost will beincluded in cost of goods sold for February?

Scholastic Brass Corporation manufactures brass musical instruments for use by high school students. The company uses a normal costing system, in which manufacturing overhead is applied on the basis of direct-labor hours. The company’s budget for the current year included the following predictions.

Budgeted total manufacturing overhead ..........................................................................................................$426,300

Budgeted total direct-labor hours (based on practical capacity) .....................................................................20,300

During March, the firm worked on the following two production jobs: Job number T81, consisting of 76 trombones Job number C40, consisting of 110 cornetsThe events of March are described as follows:

a. One thousand square feet of rolled brass sheet metal were purchased on account for $5,000.

b. Four hundred pounds of brass tubing were purchased on account for $4,000.

c. The following requisitions were submitted on March 5: Direct labor: Job number T81, 800 hours at $20 per hour Direct labor: Job number C40, 900 hours at $20 per hour Indirect labor: General factory cleanup, $4,000 Indirect labor: Factory supervisory salaries, $9,000 Requisition number 112: 250 square feet of brass sheet metal at $5 per square foot (for job number T81) Requisition number 113: 1,000 pounds of brass tubing, at $10 per pound (for job number C40) Requisition number 114: 10 gallons of valve lubricant, at $10 per gallonAll brass used in production is treated as direct material. Valve lubricant is an indirect material.

d. An analysis of labor time cards revealed the following labor usage for March.

Direct labor: Job number T81, 800 hours at $20 per hour

Direct labor: Job number C40, 900 hours at $20 per hour Indirect labor:

General factory cleanup, $4,000 Indirect labor:

Factory supervisory salaries, $9,000

e. Depreciation of the factory building and equipment during March amounted to $12,000.

f. Rent paid in cash for warehouse space used during March was $1,200.

g. Utility costs incurred during March amounted to $2,100. The invoices for these costs were received, but the bills were not paid in March.

h. March property taxes on the factory were paid in cash, $2,400.

i. The insurance cost covering factory operations for the month of March was $3,100. The insurance policy had been prepaid.

j. The costs of salaries and fringe benefits for sales and administrative personnel paid in cash during March amounted to $8,000.

k. Depreciation on administrative office equipment and space amounted to $4,000.

l. Other selling and administrative expenses paid in cash during March amounted to $1,000.

m. Job number T81 was completed on March 20.

n. Half of the trombones in job number T81 were sold on account during March for $700 each.

The March 1 balances in selected accounts are as follows:

Cash ...................................................................................................................................................................$?? 10,000

Accounts Receivable .........................................................................................................................................21,000

Prepaid Insurance .............................................................................................................................................5,000

Raw-Material Inventory .....................................................................................................................................149,000

Manufacturing Supplies Inventory ....................................................................................................................500

Work-in-Process Inventory ................................................................................................................................91,000

Finished-Goods Inventory .................................................................................................................................220,000

Accumulated Depreciation: Buildings and Equipment .....................................................................................102,000

Accounts Payable ..............................................................................................................................................13,000

Wages Payable ..................................................................................................................................................8,000

Required:

1. Calculate the company’s predetermined overhead rate for the year.

2. Prepare journal entries to record the events of March.

3. Set up T-accounts, and post the journal entries made in requirement (2).

4. Calculate the overapplied or underapplied overhead for March. Prepare a journal entry to close this balance into Cost of Goods Sold.

5. Prepare a schedule of cost of goods manufactured for March.

6. Prepare a schedule of cost of goods sold for March.

7. Prepare an income statement for March.

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