Question

You work for ThunderduckCustom Tables Inc. This is the first month of operations. Thecompany designs and manufactures specialty tables. Each table isspecially customized for the customer. This month, you have beenasked to develop and manufacture two new tables for customers. Youwill design and build the tables. This is a no nail, no screw, andno glue manufacturing ( no indirect materials used). You will bekeeping track of the costs incurred to manufacture the tables.
	The cost of the directmaterials that can be used to manufacture the table are as follows.These cost are on a per unit basis.
		Table Top	$ 1,100.00
		Table Leg	$ 200.00
		Drawer	$ 310.00
	Assume a $25 per hour wagerate to the assembly employees.
	The company uses a job order costing system andapplies manufacturing overhead to jobs based on direct laborhours.
	The company estimates that there will be 12 directlabor hours worked during the month.
	The estimated manufacturing overhead cost for themonth is:
	a.	Factory supervisor salary per month	$ 3,000.00
	b.	Rent for the factory per month	$ 600.00
	c.	Depreciation of factory equipment per month	$ 600.00
		Total Estimated manufacturing overhead	$ 4,200.00
	What is the predetermined manufacturing overheadrate?
Step 2	The first order you receivedwas to manufacture a table using a table top and four legs. This isyour Job #1. Go to the "Job #1 Cost Sheet" tab. There are threeassembly employees that spend 2 hours each to make the table. Here,you will calculate the cost of making the table by calculating thedirect material, direct labor and applied overhead cost. Completethe job cost sheet by calculating the direct material, direct laborand manufacturing overhead applied that would be incurred for job#1.
Step 3	The customer that has orderedJob #2, wants a table that is the same as Job #1, but wants to alsoadd a drawer to the table. There are three assembly employees thatspend 3 hours each to make the table. On the "Job #2 Cost Sheet"tab you calculate the cost of making the table by calculating thedirect material, direct labor and applied overheadcost.
Step 4	Here you will find a list oftransactions that must be recorded for the company for the month ofDecember. On the "General Journal" tab, you will record all ofthese entries in proper journal entry format. The following is alist of transactions that need to be recorded for the company foractivity in the month of December. Record these in the "GeneralJournal" tab using the proper journal entry format. Please use thefollowing accounts: Accounts Receivables, Raw materials, Work inprocess, Finished goods, Accumulated depreciation, Accountspayable, Salaries and wages payable, Sales revenue, Manufacturingoverhead, Cost of goods sold, Salaries and wages expense,Advertising expenses, and Depreciation expense.
1-Dec	Raw Materials purchased onaccount, $11,000.
5-Dec	All Raw Materials needed forJob #1 were requisitioned from the material storage for use duringthe month. Assume all materials are direct.
10-Dec	The following employee costswere incurred but not paid during the month:
	Total cost incurred for direct labor for Job #1Cost Sheet.
	Salary forsupervisor of the factory $3,500.
	AdministrativeSalary $2,000.
15-Dec	All Raw Materials needed forJob #2 were requisitioned from the material storage for use duringthe month. Assume all materials are direct.
16-Dec	Rent for the month of Decemberfor the factory building incurred but not paid $600.
17-Dec	Advertising costs incurred butnot paid for the month was $1,400.
20-Dec	Depreciation for the month ofDecember was recorded on equipment was $750 ($150 for equipmentused in the factory and the remainder for equipment used in sellingand administrative activities).
22-Dec	Manufacturing overhead costwas applied based on direct labor hours to Job #1 based on the POHRdetermined on the "Job Cost Sheet".
26-Dec	Job #1 was completed andtransferred to Finished Goods during the month.
28-Dec	The completed table from Job#1 was sold on account to the customer for $16,000 during themonth. (Hint: Make sure to account for the cost of the table thatwas sold using the cost from the job cost sheet.)
31-Dec	Direct labor cost incurred butnot paid for three employees to start manufacturing Job #2. Theemployees only worked one hour each, three hours total during themonth and they did not complete their work on the job.
31-Dec	Manufacturing overhead costwas applied based on direct labor hours to Job #2 based on thePOHR. Only three direct labor hours were worked on Job #2 duringthe month.
31-Dec	Any underapplied oroverapplied overhead for the month was closed out to Cost of GoodsSold.
Step 5	Post the journal entries thatyou recorded on the "General Journal" tab to the "T-accounts" tab.This is the company's first month of business, so there will not beany beginning balances. Compute the balance for each T-accountafter all of the entries have been posted.
Step 6	Prepare a Schedule of Cost ofGoods Manufactured and a Schedule of Cost of Goods Sold on the"Schedule of COGM and COGS" tab for Job #1 and Job #2 that wereworked on during the month by the company. Make sure to follow theformat noted in your book (pg. 87). (Hint: This is the company'sfirst month of operations and therefore the beginning balances willbe zero.)
Step 7	Prepare an Income Statement for the month using theTraditional Format on the "Income Statement" tab.
Step 8	Answer the additional questions below
	Check Figure: Cost of Goods Manufactured=$4,150
	What is the ending balance for raw materials?
	What is the ending balance for work inprocess?
	What is the ending balance for finished goods?
	What is the actual manufacturing overhead costincurred during December?
	What is the total applied manufacturing overheadcost during December?
	What is the unadjusted cost of goods sold?
	Was the manufacturing overhead for the month ofDecember overapplied/underapplied ?
	What is the amount of Manufacturing overheadoverapplied/underapplied?
	What is the adjusted cost of goods sold?
	What is gross margin?
	What is net operating income?
	What is the total prime cost for Job#1?
	What is the total conversion cost for job #1?
	What is the total product cost for job#1?
	What was the period cost incurred for the month ofDecember?
	What is the contributionmargin for Job #1 (assume that all selling and administrative costand all manufacturing overhead costs are fixed.)?
	What would be the totalincrease in manufacturing cost for the company if the order in Job#1 is for five tables instead of one table? (Hint: Variable costsvary with activity levels.)
	What would be the actual (not applied) total fixed manufacturingoverhead cost incurred for the company for the month if the orderin Job #1 is for five tables instead of one table assuming thiscost is with in the relevant range? Please help me with all of the steps and questions.