ADMS 2510 Chapter Notes - Chapter 6: Potato Chip, Finished Good, Indian Railways

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raspberrymouse643

29 Sep 2016

School

York University

Department

Administrative Studies

Course

ADMS 2510

Professor

Li Zhi Ma

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ADMS 2510 Full Course Notes

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Adms 2510 chapter 6 system design: process costing. Comparison of job-order and process costing: both systems have same basic purposes to assign materials, labor, and overhead costs to products and provide mechanism for computing unit costs, both systems use same basic manufacturing accounts. Finished goods: flow of costs through manufacturing accounts is basically same in both systems, difference between the two arise from 2 factors. Flow of units in process costing system is continuous. Process costing makes no sense to identify materials, labor, and overhead costs with particular order from customer: all are filled from continuous flow of virtually identical units from production line, accumulate costs by department instead of order. Job cost sheet is not used in process costing. Since focal point is departments in process costing. Instead, production report is prepared for each department. Production report summarizes number of units moving through department during a period: also provides computation of unit costs, summarized exhibit 6-1 pg.

Related Questions

Identify each statement as true or false. If false, indicate howto correct the statement.

1. Process cost systems are used to apply costs to similarproducts that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit isindistinguishable from another.
3. Companies that produce soft drinks, motion pictures, andcomputers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individualjobs.
5. Job order costing and process costing track differentmanufacturing costs elements.
6. Both job order costing and process costing account for directmaterials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for bothjob order costing and process costing.
8. In a process cost system, only one work in process account isused.
9. In a process cost system, costs are summarized in a job costsheet.
10. In a process cost system, the unit cost is total manufacturingcosts for the period divided by the units produced during theperiod.

byzantiumpanda529

The Sierra Inc uses job order costing system. The company uses machine hours to apply overhead cost to jobs. At the beginning of 2016, the company estimated that 150,000 machine hours would be worked and $900,000 overhead cost would be incurred during 2016.

The balances of raw materials, work in process (WIP), and finished goods at the beginning of 2016 were as follows:

The Fine manufacturing company recorded the following transactions during 2016:

Raw materials purchased on account, $820,000.

Raw materials were requisitioned for use in production, $760,000 ($720,000 direct materials and $40,000 indirect materials).

Direct labor, $150,000; indirect labor, $220,000; sales commission, $180,000; and administrative salaries, $400,000.

Sales travel costs were $34,000.

Utility costs incurred in the factory, $86,000.

Advertising expenses were $360,000.

Depreciation for the year was $700,000 ($560,000 relates to factory and $140,000 relates to selling and administrative activities).

Insurance expired during the year, $20,000 ($14,000 relates to factory operations and $6,000 relates to selling and administrative activities).

Fine manufacturing company worked 160,000 machine hours. Manufacturing overhead was applied to production.

Goods costing $1,800,000 were completed during the year.

The goods costing $1,740,000 were sold to customers for $3,000,000.

Required:

Prepare journal entries, T-accounts and income statement (Links to an external site.)Links to an external site. from the above information.

ivorycicada911

I need to Prepare entries for a job order, cost system, and cost of goods manufactured schedule, but my numbers aren't matching up. Please answer both parts of the question.

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017, the general ledger for Case Inc. contains the following data.

P15-3A Prepare entries for a job order cost system and cost of goods manufactured schedule
Case Inc. is a construction company specializing in custom patios. The patios are constructed of
concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017,
the general ledger for Case Inc. contains the following data.

Raw Materials Inventory			$4,200		Manufacturing Overhead Applied		$32,640
Work in Process Inventory			$5,540		Manufacturing Overhead Incurred		$31,650

Subsidiary data for Work in Process Inventory on June 1 are as follows.

	Job Cost Sheets
			Customer Job
	Cost Element		Rodgers		Stevens	Linton
	Direct materials		$600		$800	$900
	Direct labor		320		540	580
	Manufacturing overhead		400		675	725
			$1,320		$2,015	$2,205

During June, raw materials purchased on account were $4,900, and all wages were paid. Additional
overhead costs consisted of depreciation on equipment $900 and miscellaneous costs of $400 incurred
on account.
A summary of materials requisition slips and time tickets for June show the following.

	Customer Job		Materials Requisition slips		Time tickets
	Rodgers		$ 800		$850
	Koss		2,000		800
	Stevens		500		360
	Linton		1,300		1,200
	Rodgers		300		390
			4,900		3,600
	General use		1,500		1,200
			$ 6,400		$4,800

Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for
customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $18,900.
Each customer paid in full.

Instructions
(a)	Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred,
	and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to
	production; and (3) completion of jobs and sale of goods.
(b)	Post the entries to Work in Process Inventory.
(c )	Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.
(d)	Prepare a cost of goods manufactured schedule for June.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .



(a)(1)	Journalize the June transactions for purchase of raw materials, factory labor costs incurred,
	and manufacturing overhead costs incurred

	Raw Malerials Inventory
		Accounts Payable


	Factory Labor
		Cash


	Manufacturing Overhead
		Accumulated Depreciation- Equipment
		Accounts Payable


(a)(2)	Journalize the June transactions for assignment of direct materials, labor, and overhead to production

	Work in Pricess Inventory
	Manufacturing Overhead
		Raw Malerials Inventory


	Work in Pricess Inventory
	Manufacturing Overhead
		Factory Labor


	Work in Pricess Inventory
		Manufacturing Overhead


(a)(3)	Journalize the June transactions for completion of jobs and sale of goods.

	Finished Goods Inventory
		Work in Process Inventory


	Cash
		Sales


	Cost of Goods Sold
		Finished Goods Inventory


(b)	Post the entries to Work in Process Inventory.

	Work in Process Inventory
	6/1	Balance		June	Completed work
		Direct Materials
		Direct labor
		Overhead applied

	6/30	Balance


(c )	Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.

	6/30 balance in Work in Process Inventory
	Unfinished Job (Koss)
	Direct materials
	Direct labor
	Manufacturing overhead



(d)	Prepare a cost of goods manufactured schedule for June.

	CASE INC.
	Cost of Goods Manufactured Schedule
	For the Month Ended June 30, 2017

	Work in process, June 1
	Direct materials used
	Direct labor
	Manufacturing overhead applied
	Total manufacturing costs
	Total cost of work in process
	Less: Work in process, June 30
	Cost of goods manufactured



After you have completed P15-3A, consider the following additional question.
1.	Assume that indirect labor and raw materials purchases changed to $1,400 and $6,800 respectively.
	Also assume that overhead is applied at the rate of $1.50 per dollar of direct labor. The three
	completed jobs were sold for $22,000 cash. Revise the journal entries to reflect these changes.

turquoisewater-buffalo175

ADMS 2510 Chapter Notes - Chapter 6: Potato Chip, Finished Good, Indian Railways

ADMS 2510 Full Course Notes

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