Case 3-49
Avid Assemblers uses normal job-order costing to assign costs toproducts. The company assembles and packages 25 different productsaccording to customer specifications. Products are worked on inbatches of 20 to 40 units. Each batch is given a job number. OnOctober 1, the company had the following balances:
Raw materials $9,800 Work in process 65,847 Finished goods 30,640
Work in process consisted of the following jobs:
Job 22 Job 24 Job 25 Direct materials $6,200 $5,190 $4,800 Direct labour 10,500 9,210 9,500 Applied overhead 7,350 6,447 6,650 Total $24,050 $20,847 $20,950 Number of units 20 40 30
Finished goods consisted of Job 23, with the following costs:
Job 23 Direct materials $8,200 Direct labour 13,200 Applied overhead 9,240 Total $30,640 Number of units 50
Shown below are the direct cost data related to jobs started inOctober:
Job 26 Job 27 Job 28 Total Direct materials $5,180 $5,600 $4,200 $14,980 Direct labour 11,200 9,340 5,910 26,450 Number of units 20 30 20
Other information:
1. Direct materials and direct labour added tobeginning work in process in October were as follows:
Job 22 Job 24 Job 25 Total Direct materials $1,150 $610 $1,500 $3,260 Direct labour 3,000 4,500 5,500 $13,000
2. Overhead is applied at a predetermined rate basedon the direct labour cost. 3. Actual expenses for October were as follows:
Supervisory salaries $6,000 Supplies (factory) $2,100 Factory rent 5,000 Selling expenses 8,500 Depreciation (machines) 5,000 Property tax and insurance 2,250 Indirect labour 4,000 CPP, EI, and other benefits* 4,200
* 80% of employer contributions and benefits relate to factorypersonnel. 4. Purchases of direct materials (raw materials)during October amounted to $28,500. Indirect materials (supplies)are handled in a separate account. 5. Only Job Nos. 27 and 28 are still in process atclosing on October 31. Finished goods consisted only of Job No. 25at month end. 6.
Avid writes off any under- and over-applied overhead to Cost ofGoods Sold in the month in which it is incurred.
Requirements:
a.Calculate Predetermined overhead rate
b.Calculate Unit cost of job 24 in October
c.Calulate the Oct 31 Balances for the following account:
Raw Materials, Work in Process, Finished Goods
d.What is the cost of goods manufactured?
e. Determine the under- or over- paid in October
Prepare the journal entry to dispose of this amount.
Case 3-49
Avid Assemblers uses normal job-order costing to assign costs toproducts. The company assembles and packages 25 different productsaccording to customer specifications. Products are worked on inbatches of 20 to 40 units. Each batch is given a job number. OnOctober 1, the company had the following balances:
| Raw materials | $9,800 | |
| Work in process | 65,847 | |
| Finished goods | 30,640 |
Work in process consisted of the following jobs:
| Job 22 | Job 24 | Job 25 | |||||
| Direct materials | $6,200 | $5,190 | $4,800 | ||||
| Direct labour | 10,500 | 9,210 | 9,500 | ||||
| Applied overhead | 7,350 | 6,447 | 6,650 | ||||
| Total | $24,050 | $20,847 | $20,950 | ||||
| Number of units | 20 | 40 | 30 |
Finished goods consisted of Job 23, with the following costs:
| Job 23 | ||
| Direct materials | $8,200 | |
| Direct labour | 13,200 | |
| Applied overhead | 9,240 | |
| Total | $30,640 | |
| Number of units | 50 |
Shown below are the direct cost data related to jobs started inOctober:
| Job 26 | Job 27 | Job 28 | Total | ||||||
| Direct materials | $5,180 | $5,600 | $4,200 | $14,980 | |||||
| Direct labour | 11,200 | 9,340 | 5,910 | 26,450 | |||||
| Number of units | 20 | 30 | 20 |
Other information:
| 1. | Direct materials and direct labour added tobeginning work in process in October were as follows:
| |||||||||||||||||||||||||||||||||||
| 2. | Overhead is applied at a predetermined rate basedon the direct labour cost. | |||||||||||||||||||||||||||||||||||
| 3. | Actual expenses for October were as follows:
* 80% of employer contributions and benefits relate to factorypersonnel. | |||||||||||||||||||||||||||||||||||
| 4. | Purchases of direct materials (raw materials)during October amounted to $28,500. Indirect materials (supplies)are handled in a separate account. | |||||||||||||||||||||||||||||||||||
| 5. | Only Job Nos. 27 and 28 are still in process atclosing on October 31. Finished goods consisted only of Job No. 25at month end. | |||||||||||||||||||||||||||||||||||
6. | Avid writes off any under- and over-applied overhead to Cost ofGoods Sold in the month in which it is incurred. Requirements: | |||||||||||||||||||||||||||||||||||
a.Calculate Predetermined overhead rate
b.Calculate Unit cost of job 24 in October
c.Calulate the Oct 31 Balances for the following account:
Raw Materials, Work in Process, Finished Goods
d.What is the cost of goods manufactured?
e. Determine the under- or over- paid in October
Prepare the journal entry to dispose of this amount.
Related questions
Analyzing Manufacturing Cost Accounts
Big Wave Company manufactures surf boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for July:
| Materials | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 35,900 | July 31 | Requisitions | (A) |
| July 31 | Purchases | 144,300 | |||
| Work in Process | |||||
|---|---|---|---|---|---|
| July 1 | Balance | (B) | July 31 | Completed jobs | (F) |
| July 31 | Materials | (C) | |||
| July 31 | Direct labor | (D) | |||
| July 31 | Factory overhead applied | (E) | |||
| Finished Goods | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 0 | July 31 | Cost of goods sold | (G) |
| July 31 | Completed jobs | (F) | |||
| Wages Payable | |||||
|---|---|---|---|---|---|
| July 31 | Wages incurred | 118,800 | |||
| Factory Overhead | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 21,300 | July 31 | Factory overhead applied | (E) |
| July 31 | Indirect labor | (H) | |||
| July 31 | Indirect materials | 19,200 | |||
| July 31 | Other overhead | 61,600 | |||
In addition, the following information is available:
Materials and direct labor were applied to six jobs in July:
| Job No. | Style | Quantity | Direct Materials | Direct Labor | ||||||||
| No. 21 | X-10 | 170 | $21,560 | $12,000 | ||||||||
| No. 22 | X-20 | 420 | 42,040 | 27,000 | ||||||||
| No. 23 | X-50 | 180 | 13,780 | 7,000 | ||||||||
| No. 24 | T-20 | 280 | 42,560 | 28,000 | ||||||||
| No. 25 | X-40 | 170 | 23,040 | 16,000 | ||||||||
| No. 26 | T-10 | 150 | 10,550 | 5,000 | ||||||||
| Total | 1,370 | $153,530 | $95,000 | |||||||||
Factory overhead is applied to each job at a rate of 130% of direct labor cost.
The July 1 Work in Process balance consisted of two jobs, as follows:
| Job No. | Style | Work in Process, July 1 | |||
| Job 21 | X-10 | $4,900 | |||
| Job 22 | X-20 | 16,400 | |||
| Total | $21,300 | ||||
Customer jobs completed and units sold in July were as follows:
| Job No. | Style | Completed in July | Units Sold in July | |
| No. 21 | X-10 | X | 136 | |
| No. 22 | X-20 | X | 336 | |
| No. 23 | X-50 | 0 | ||
| No. 24 | T-20 | X | 235 | |
| No. 25 | X-40 | X | 141 | |
| No. 26 | T-10 | 0 | ||
1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers.
| Job No. | Quantity | July 1 Work in Process | Direct Materials | Direct Labor | Factory Overhead | Total Cost | Unit Cost | Units Sold | Cost of Goods Sold | ||||||||
| No. 21 | $ 4,900 | $ 21,560 | $ 12,000 | $ | $ | $ | $ | ||||||||||
| No. 22 | 16,400 | 42,040 | 27,000 | ||||||||||||||
| No. 23 | 13,780 | 7,000 | |||||||||||||||
| No. 24 | 42,560 | 28,000 | |||||||||||||||
| No. 25 | 23,040 | 16,000 | |||||||||||||||
| No. 26 | 10,550 | 5,000 | |||||||||||||||
| Total | $21,300 | 153,530 | 95,000 | $ | $ | $ | |||||||||||
a. Materials Requisitions $
b. Work in Process Beginning Balance $
c. Direct Materials $
d. Direct Labor $
e. Factory overhead applied $
f. Completed jobs $
g. Cost of goods sold $
h. Indirect labor $
2. Determine the July 31 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.
| Materials: | $ |
| Work in Process: | $ |
| Finished Goods: | $ |
| Factory Overhead: | $ |
Analyzing Manufacturing Cost Accounts
Big Wave Company manufactures surf boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for July:
| Materials | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 36,400 | July 31 | Requisitions | (A) |
| July 31 | Purchases | 146,400 | |||
| Work in Process | |||||
|---|---|---|---|---|---|
| July 1 | Balance | (B) | July 31 | Completed jobs | (F) |
| July 31 | Materials | (C) | |||
| July 31 | Direct labor | (D) | |||
| July 31 | Factory overhead applied | (E) | |||
| Finished Goods | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 0 | July 31 | Cost of goods sold | (G) |
| July 31 | Completed jobs | (F) | |||
| Wages Payable | |||||
|---|---|---|---|---|---|
| July 31 | Wages incurred | 116,300 | |||
| Factory Overhead | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 21,700 | July 31 | Factory overhead applied | (E) |
| July 31 | Indirect labor | (H) | |||
| July 31 | Indirect materials | 19,500 | |||
| July 31 | Other overhead | 58,700 | |||
In addition, the following information is available:
Materials and direct labor were applied to six jobs in July:
| Job No. | Style | Quantity | Direct Materials | Direct Labor | ||||||||
| No. 21 | X-10 | 200 | $25,600 | $15,000 | ||||||||
| No. 22 | X-20 | 390 | 40,620 | 26,000 | ||||||||
| No. 23 | X-50 | 170 | 14,500 | 7,000 | ||||||||
| No. 24 | T-20 | 250 | 39,250 | 25,000 | ||||||||
| No. 25 | X-40 | 180 | 26,380 | 16,000 | ||||||||
| No. 26 | T-10 | 130 | 9,390 | 4,000 | ||||||||
| Total | 1,320 | $155,740 | $93,000 | |||||||||
Factory overhead is applied to each job at a rate of 130% of direct labor cost.
The July 1 Work in Process balance consisted of two jobs, as follows:
| Job No. | Style | Work in Process, July 1 | |||
| Job 21 | X-10 | $5,900 | |||
| Job 22 | X-20 | 15,800 | |||
| Total | $21,700 | ||||
Customer jobs completed and units sold in July were as follows:
| Job No. | Style | Completed in July | Units Sold in July | |
| No. 21 | X-10 | X | 160 | |
| No. 22 | X-20 | X | 312 | |
| No. 23 | X-50 | 0 | ||
| No. 24 | T-20 | X | 210 | |
| No. 25 | X-40 | X | 149 | |
| No. 26 | T-10 | 0 | ||
1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers.
| Job No. | Quantity | July 1 Work in Process | Direct Materials | Direct Labor | Factory Overhead | Total Cost | Unit Cost | Units Sold | Cost of Goods Sold | ||||||||
| No. 21 | $ 5,900 | $ 25,600 | $ 15,000 | $ | $ | $ | $ | ||||||||||
| No. 22 | 15,800 | 40,620 | 26,000 | ||||||||||||||
| No. 23 | 14,500 | 7,000 | |||||||||||||||
| No. 24 | 39,250 | 25,000 | |||||||||||||||
| No. 25 | 26,380 | 16,000 | |||||||||||||||
| No. 26 | 9,390 | 4,000 | |||||||||||||||
| Total | $21,700 | 155,740 | 93,000 | $ | $ | $ | |||||||||||
a. Materials Requisitions $
b. Work in Process Beginning Balance $
c. Direct Materials $
d. Direct Labor $
e. Factory overhead applied $
f. Completed jobs $
g. Cost of goods sold $
h. Indirect labor $
2. Determine the July 31 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.
| Materials: | $ |
| Work in Process: | $ |
| Finished Goods: | $ |
| Factory Overhead: | $ |
Analyzing Manufacturing Cost Accounts
Big Wave Company manufactures surf boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for July:
| Materials | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 28,000 | July 31 | Requisitions | (A) |
| July 31 | Purchases | 112,300 | |||
| Work in Process | |||||
|---|---|---|---|---|---|
| July 1 | Balance | (B) | July 31 | Completed jobs | (F) |
| July 31 | Materials | (C) | |||
| July 31 | Direct labor | (D) | |||
| July 31 | Factory overhead applied | (E) | |||
| Finished Goods | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 0 | July 31 | Cost of goods sold | (G) |
| July 31 | Completed jobs | (F) | |||
| Wages Payable | |||||
|---|---|---|---|---|---|
| July 31 | Wages incurred | 113,800 | |||
| Factory Overhead | |||||
|---|---|---|---|---|---|
| July 1 | Balance | 20,800 | July 31 | Factory overhead applied | (E) |
| July 31 | Indirect labor | (H) | |||
| July 31 | Indirect materials | 14,900 | |||
| July 31 | Other overhead | 100,000 | |||
In addition, the following information is available:
Materials and direct labor were applied to six jobs in July:
| Job No. | Style | Quantity | Direct Materials | Direct Labor | ||||||||
| No. 21 | X-10 | 180 | $18,020 | $13,000 | ||||||||
| No. 22 | X-20 | 390 | 31,950 | 25,000 | ||||||||
| No. 23 | X-50 | 170 | 11,530 | 7,000 | ||||||||
| No. 24 | T-20 | 270 | 31,050 | 26,000 | ||||||||
| No. 25 | X-40 | 190 | 21,170 | 17,000 | ||||||||
| No. 26 | T-10 | 100 | 5,800 | 3,000 | ||||||||
| Total | 1,300 | $119,520 | $91,000 | |||||||||
Factory overhead is applied to each job at a rate of 170% of direct labor cost.
The July 1 Work in Process balance consisted of two jobs, as follows:
| Job No. | Style | Work in Process, July 1 | |||
| Job 21 | X-10 | $5,200 | |||
| Job 22 | X-20 | 15,600 | |||
| Total | $20,800 | ||||
Customer jobs completed and units sold in July were as follows:
| Job No. | Style | Completed in July | Units Sold in July | |
| No. 21 | X-10 | X | 144 | |
| No. 22 | X-20 | X | 312 | |
| No. 23 | X-50 | 0 | ||
| No. 24 | T-20 | X | 227 | |
| No. 25 | X-40 | X | 158 | |
| No. 26 | T-10 | 0 | ||
1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers.
| Job No. | Quantity | July 1 Work in Process | Direct Materials | Direct Labor | Factory Overhead | Total Cost | Unit Cost | Units Sold | Cost of Goods Sold | ||||||||
| No. 21 | $ 5,200 | $ 18,020 | $ 13,000 | $ | $ | $ | $ | ||||||||||
| No. 22 | 15,600 | 31,950 | 25,000 | ||||||||||||||
| No. 23 | 11,530 | 7,000 | |||||||||||||||
| No. 24 | 31,050 | 26,000 | |||||||||||||||
| No. 25 | 21,170 | 17,000 | |||||||||||||||
| No. 26 | 5,800 | 3,000 | |||||||||||||||
| Total | $20,800 | 119,520 | 91,000 | $ | $ | $ | |||||||||||
a. Materials Requisitions $
b. Work in Process Beginning Balance $
c. Direct Materials $
d. Direct Labor $
e. Factory overhead applied $
f. Completed jobs $
g. Cost of goods sold $
h. Indirect labor $
2. Determine the July 31 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.
| Materials: | $ |
| Work in Process: | $ |
| Finished Goods: | $ |
| Factory Overhead: | $ |
