P2-4A Mabry Manufacturing Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K.
In establishing the predetermined overhead rates for 2008 the following estimates were made for the year.
Department
D E K
Manufacturing overhead $1,050,000 $1,500,000 $840,000
Direct labor costs $1,500,000 $1,250,000 $450,000
Direct labor hours 100,000 125,000 40,000
Machine hours 400,000 500,000 120,000
During January, the job cost sheets showed the following costs and production data.
Department
D E K
Direct materials used $140,000 $126,000 $78,000
Direct labor costs $120,000 $110,000 $37,500
Manufacturing overhead incurred $89,000 $124,000 $74,000
Direct labor hours 8,000 11,000 3,500
Machine hours 34,000 45,000 10,400
Required:
a) Compute the predetermined overhead rate for each department
b) Compute the total manufacturing costs assigned to jobs in January in each department
c) Compute the under- or overapplied overhead for each department at January 31
Click here for the solution: Mabry Manufacturing Company uses a job order cost system in each of its three manufacturing departments
Showing posts with label job. Show all posts
Showing posts with label job. Show all posts
Monday, October 26, 2015
Saturday, October 17, 2015
Dacher Company uses a job order cost system
Dacher Company uses a job order cost system. The following data summarize the operations related to production for October:
a. Materials purchased on account, $450,000.
b. Materials requisitioned, $425,000, of which $4,500 was for general factory use.
c. Factory labor used, $385,000, of which $95,000 was indirect.
d. Other costs incurred on account were for factory overhead, $125,400; selling expenses, $87,500; and administrative expenses, $56,400.
e. Prepaid expenses expired for factory overhead were $12,500; for selling expenses, $14,500; and for administrative expenses, $8,500.
f. Depreciation of factory equipment was $25,300; of office equipment, $31,600; and of store equipment, $7,600.
g. Factory overhead costs applied to jobs, $261,500.
h. Jobs completed, $965,000.
i. Cost of goods sold, $952,400.
Journalize the entries to record the summarized operations.
Click here for the solution: Dacher Company uses a job order cost system
a. Materials purchased on account, $450,000.
b. Materials requisitioned, $425,000, of which $4,500 was for general factory use.
c. Factory labor used, $385,000, of which $95,000 was indirect.
d. Other costs incurred on account were for factory overhead, $125,400; selling expenses, $87,500; and administrative expenses, $56,400.
e. Prepaid expenses expired for factory overhead were $12,500; for selling expenses, $14,500; and for administrative expenses, $8,500.
f. Depreciation of factory equipment was $25,300; of office equipment, $31,600; and of store equipment, $7,600.
g. Factory overhead costs applied to jobs, $261,500.
h. Jobs completed, $965,000.
i. Cost of goods sold, $952,400.
Journalize the entries to record the summarized operations.
Click here for the solution: Dacher Company uses a job order cost system
Sunday, September 27, 2015
Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
BE 15-5 Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4. Prepare the job cost sheets for each of the three jobs. (Note: You may omit the column for manufacturing overhead).
Data given in BE15-3 and 15-4:
BE 15-3 In January, Reyes Tool & Die requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600.
BE 15-4 During January, time tickets show that the factory labor of $5,000 was used as follows: Job 1 $1,200, Job 2 $1,600 Job 3 $1,400, and general factory use $800.
Click here for the solution: Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
Data given in BE15-3 and 15-4:
BE 15-3 In January, Reyes Tool & Die requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600.
BE 15-4 During January, time tickets show that the factory labor of $5,000 was used as follows: Job 1 $1,200, Job 2 $1,600 Job 3 $1,400, and general factory use $800.
Click here for the solution: Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
Tuesday, September 8, 2015
Finlon Upholstery, Inc. uses a job-order costing system to accumulate manufacturing costs
Finlon Upholstery, Inc. uses a job-order costing system to accumulate manufacturing costs. The company's work-in-process on December 31, 20x1, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no finished-goods inventory on this date.
Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the company's practical capacity, in terms of direct-labor hours, multiplied by the budgeted direct-labor rate.) Budgeted totals for 20x2 for direct labor and manufacturing overhead are $4,200,000 and $5,460,000, respectively. Actual results for the year follow.
Direct Materials Used $5,600,000.00
Direct Labor $4,350,000.00
Indirect Material Used $65,000.00
Indirect Labor $2,860,000.00
Factory Depreciation $1,740,000.00
Factory Insurance $59,000.00
Factory Utilities $830,000.00
Selling and Administrative Expenses $2,160,000.00
Total $17,664,000.00
Job no. 2077 was completed in January 20x2; there was no work in process at year-end. All jobs produced during 20x2 were sold with the exception of job no. 2143, which contained direct material costs of $156,000 and direct-labor charges of $85,000. The company charges any under- or overapplied overhead to Cost of Goods Sold.
Directions:
1 Calculate the companies predetermined overhead application rate.
2.Calculate the additions to the work-in-process inventory account for the direct material used, direct labor and manufacturing overhead.
3.Calculate the finished goods inventory for the 12/31/x2 balance sheet.
4.Calculate the over-applied or under applied overhead at year end.
5.Explain if it is appropriate to include the selling and administrative expenses within cost of goods sold.
Click here for the solution: Finlon Upholstery, Inc. uses a job-order costing system to accumulate manufacturing costs
Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the company's practical capacity, in terms of direct-labor hours, multiplied by the budgeted direct-labor rate.) Budgeted totals for 20x2 for direct labor and manufacturing overhead are $4,200,000 and $5,460,000, respectively. Actual results for the year follow.
Direct Materials Used $5,600,000.00
Direct Labor $4,350,000.00
Indirect Material Used $65,000.00
Indirect Labor $2,860,000.00
Factory Depreciation $1,740,000.00
Factory Insurance $59,000.00
Factory Utilities $830,000.00
Selling and Administrative Expenses $2,160,000.00
Total $17,664,000.00
Job no. 2077 was completed in January 20x2; there was no work in process at year-end. All jobs produced during 20x2 were sold with the exception of job no. 2143, which contained direct material costs of $156,000 and direct-labor charges of $85,000. The company charges any under- or overapplied overhead to Cost of Goods Sold.
Directions:
1 Calculate the companies predetermined overhead application rate.
2.Calculate the additions to the work-in-process inventory account for the direct material used, direct labor and manufacturing overhead.
3.Calculate the finished goods inventory for the 12/31/x2 balance sheet.
4.Calculate the over-applied or under applied overhead at year end.
5.Explain if it is appropriate to include the selling and administrative expenses within cost of goods sold.
Click here for the solution: Finlon Upholstery, Inc. uses a job-order costing system to accumulate manufacturing costs
Wednesday, September 2, 2015
BC Company uses a job order cost accounting system
BC Company uses a job order cost accounting system. During the month of April, the following events occurred:
(a) Purchased raw materials on credit, $32,000.
(b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials.
(c) Paid factory payroll for the month totaling $37,700 which includes $8,200 indirect labor.
(d) Assigned the factory payroll to jobs and overhead.
Make the necessary journal entries to record the above transactions and events.
Click here for the solution: BC Company uses a job order cost accounting system
(a) Purchased raw materials on credit, $32,000.
(b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials.
(c) Paid factory payroll for the month totaling $37,700 which includes $8,200 indirect labor.
(d) Assigned the factory payroll to jobs and overhead.
Make the necessary journal entries to record the above transactions and events.
Click here for the solution: BC Company uses a job order cost accounting system
Friday, August 21, 2015
You have accepted a job as the controller of a start-up company–a consulting firm, called Sheila Shaw Consulting
You have accepted a job as the controller of a start-up company–a consulting firm, called Sheila Shaw Consulting. Sheila is an excellent consultant, but not a good accountant. She has attempted to prepare the first month’s financial statements, however, the statements do not balance. Her financial statements are a good starting point, but your job is to correct the errors.
The statements are presented here.
SHEILA SHAW CONSULTING
Balance Sheet
August 31, 2007
Assets Liabilities
Current assets: Current liabilities:
Cash................................ $ 21,300 Accounts payable........ $ 1,250
Accounts receivable....... 3,800 Prepaid rent................. 2,050
Supplies........................... 875 Unearned fees.............. 1,150
Salaries payable.............. 150 Total liabilities................ $ 4,450
Prepaid insurance.......... 1,670
Total current assets..... $ 27,795
Property, plant, and
Equipment:...................... Owner's Equity
Office equipment............ $ 21,250 Sheila Shaw, capital....... 47,720
Less accum. depr............ 675
Total Property, plant,
and equipment............. 20,575 Total liabilities and
Total assets......................... $ 48,370 owner's equity............. $ 52,170
SHEILA SHAW CONSULTING
Income Statement
For the Month Ended August 31, 2007
Fees earned.................................................................................... $ 24,325
Expenses:
Salary expense....................................................................... $1,550
Rent expense.......................................................................... 1,200
Supplies expense.................................................................... 1,250
Insurance expense................................................................. 1,000
Miscellaneous expense.......................................................... 715
Interest expense..................................................................... 65
Bad Debt expense.................................................................. 150
Repairs and Maintenance.................................................... 200
Utilities expense..................................................................... 150
Payroll Tax expense.............................................................. 125
Office expense....................................................................... 525
Total expenses................................................................... 6,930
Net income..................................................................................... $ 17,395
SHEILA SHAW CONSULTING
Statement of Owner's Equity
For the Month Ended August 31, 2007
Sheila Shaw, capital, August 1, 2007........................................... $ 0
Additional investments during the month................................... 36,000
Total............................................................................................... $ 36,000
Net income for the month............................................................. $ 17,395
Less withdrawals........................................................................... 5,000
Increase in owner's equity............................................................ 12,395
Sheila Shaw, capital, August 31, 2007......................................... $ 48,395
SHEILA SHAW CONSULTING
Statement of Cash Flows
For the Month Ended August 31, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the month:................................................... $17,395
Adjustment for depreciation....................................... 675
Cash provided by operating activities................................. 18,070
(Increase) in working capital items
Accounts receivable.......................................................... (3,800)
Supplies.............................................................................. (875)
Prepaid expenses............................................................... 3,720
Accounts payable.............................................................. 1,250
Salaries payable................................................................. 150
Unearned fees.................................................................... 1,150
Cash flows from operating activities........................................... $18,990
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of office equipment........................................... (21,250)
Cash flows from investing activities............................................ $(21,250)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from shareholder (net of withdrawals).............. 31,000
Cash flows from financing activities........................................... $31,000
Net increase in cash....................................................................... $28,740
CASH-BEGINNING OF PERIOD............................................. 0
CASH-END OF PERIOD............................................................ $21,300
Sheila is grateful to have you on board as her controller, and you are eager to make a good impression on her by finding the errors in her statements. Download Sheila’s statements and make the changes to them. All the information you need to find the errors is contained in these statements.
Hint: There are 2 errors in the Balance Sheet, 1 error in the Income Statement, 1 error in the Statement of Owner’s Equity, and 2 errors in the Statement of Cash Flows. You will want to keep in mind all that you have learned in terms of the items on financial statements which are duplicated and flow from one statement to another.
Assignment Checklist:
1. Report 2 balance sheet errors
2. Produces 1 statement of owner’s equity errors
3. Report 2 errors on the statement of cash
4. Prepare corrected financial statements
Click here for the solution: You have accepted a job as the controller of a start-up company–a consulting firm, called Sheila Shaw Consulting
The statements are presented here.
SHEILA SHAW CONSULTING
Balance Sheet
August 31, 2007
Assets Liabilities
Current assets: Current liabilities:
Cash................................ $ 21,300 Accounts payable........ $ 1,250
Accounts receivable....... 3,800 Prepaid rent................. 2,050
Supplies........................... 875 Unearned fees.............. 1,150
Salaries payable.............. 150 Total liabilities................ $ 4,450
Prepaid insurance.......... 1,670
Total current assets..... $ 27,795
Property, plant, and
Equipment:...................... Owner's Equity
Office equipment............ $ 21,250 Sheila Shaw, capital....... 47,720
Less accum. depr............ 675
Total Property, plant,
and equipment............. 20,575 Total liabilities and
Total assets......................... $ 48,370 owner's equity............. $ 52,170
SHEILA SHAW CONSULTING
Income Statement
For the Month Ended August 31, 2007
Fees earned.................................................................................... $ 24,325
Expenses:
Salary expense....................................................................... $1,550
Rent expense.......................................................................... 1,200
Supplies expense.................................................................... 1,250
Insurance expense................................................................. 1,000
Miscellaneous expense.......................................................... 715
Interest expense..................................................................... 65
Bad Debt expense.................................................................. 150
Repairs and Maintenance.................................................... 200
Utilities expense..................................................................... 150
Payroll Tax expense.............................................................. 125
Office expense....................................................................... 525
Total expenses................................................................... 6,930
Net income..................................................................................... $ 17,395
SHEILA SHAW CONSULTING
Statement of Owner's Equity
For the Month Ended August 31, 2007
Sheila Shaw, capital, August 1, 2007........................................... $ 0
Additional investments during the month................................... 36,000
Total............................................................................................... $ 36,000
Net income for the month............................................................. $ 17,395
Less withdrawals........................................................................... 5,000
Increase in owner's equity............................................................ 12,395
Sheila Shaw, capital, August 31, 2007......................................... $ 48,395
SHEILA SHAW CONSULTING
Statement of Cash Flows
For the Month Ended August 31, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the month:................................................... $17,395
Adjustment for depreciation....................................... 675
Cash provided by operating activities................................. 18,070
(Increase) in working capital items
Accounts receivable.......................................................... (3,800)
Supplies.............................................................................. (875)
Prepaid expenses............................................................... 3,720
Accounts payable.............................................................. 1,250
Salaries payable................................................................. 150
Unearned fees.................................................................... 1,150
Cash flows from operating activities........................................... $18,990
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of office equipment........................................... (21,250)
Cash flows from investing activities............................................ $(21,250)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from shareholder (net of withdrawals).............. 31,000
Cash flows from financing activities........................................... $31,000
Net increase in cash....................................................................... $28,740
CASH-BEGINNING OF PERIOD............................................. 0
CASH-END OF PERIOD............................................................ $21,300
Sheila is grateful to have you on board as her controller, and you are eager to make a good impression on her by finding the errors in her statements. Download Sheila’s statements and make the changes to them. All the information you need to find the errors is contained in these statements.
Hint: There are 2 errors in the Balance Sheet, 1 error in the Income Statement, 1 error in the Statement of Owner’s Equity, and 2 errors in the Statement of Cash Flows. You will want to keep in mind all that you have learned in terms of the items on financial statements which are duplicated and flow from one statement to another.
Assignment Checklist:
1. Report 2 balance sheet errors
2. Produces 1 statement of owner’s equity errors
3. Report 2 errors on the statement of cash
4. Prepare corrected financial statements
Click here for the solution: You have accepted a job as the controller of a start-up company–a consulting firm, called Sheila Shaw Consulting
Saturday, August 1, 2015
During 2010 Nilsen Company started a construction job with a contract price of $1,600,000
E18-4 (Recognition of Profit on Long-Term Contracts) During 2010 Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2012. The following information is available.
2010 2011 2012
Costs incurred to date $400,000 $825,000 $1,070,000
Estimated costs to complete 600,000 275,000 –0–
Billings to date 300,000 900,000 1,600,000
Collections to date 270,000 810,000 1,425,000
Instructions
(a) Compute the amount of gross profit to be recognized each year assuming the percentage-of-completion method is used.
(b) Prepare all necessary journal entries for 2011.
(c) Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used.
Click here for the solution: During 2010 Nilsen Company started a construction job with a contract price of $1,600,000
2010 2011 2012
Costs incurred to date $400,000 $825,000 $1,070,000
Estimated costs to complete 600,000 275,000 –0–
Billings to date 300,000 900,000 1,600,000
Collections to date 270,000 810,000 1,425,000
Instructions
(a) Compute the amount of gross profit to be recognized each year assuming the percentage-of-completion method is used.
(b) Prepare all necessary journal entries for 2011.
(c) Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used.
Click here for the solution: During 2010 Nilsen Company started a construction job with a contract price of $1,600,000
Friday, July 31, 2015
Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $1,800 of direct materials, $1,600 of direct labor, and $800 of overhead
Problem 13-44 Cost-Based Pricing Decision
Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $1,800 of direct materials, $1,600 of direct labor, and $800 of overhead. Jeremy normally applies a standard markup based on cost of goods sold to arrive at an initial bid price. He then adjusts the price as necessary in light of other factors (e.g., competitive pressure). Last year’s income statement is as follows:
Sales $130,000
Cost of Goods Sold $48,100
Gross Margin $81,900
Selling and Admin Expense $46,300
Operating Income $35,600
1. Calculate the markup that Jeremy will use.
2. What is Jeremy's initial bid price?
Click here for the solution: Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $1,800 of direct materials, $1,600 of direct labor, and $800 of overhead
Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $1,800 of direct materials, $1,600 of direct labor, and $800 of overhead. Jeremy normally applies a standard markup based on cost of goods sold to arrive at an initial bid price. He then adjusts the price as necessary in light of other factors (e.g., competitive pressure). Last year’s income statement is as follows:
Sales $130,000
Cost of Goods Sold $48,100
Gross Margin $81,900
Selling and Admin Expense $46,300
Operating Income $35,600
1. Calculate the markup that Jeremy will use.
2. What is Jeremy's initial bid price?
Click here for the solution: Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $1,800 of direct materials, $1,600 of direct labor, and $800 of overhead
Tuesday, June 23, 2015
ACC 421 Week 3 During 2007 Pierson Company started a construction job with a contract price of $1,500,000
ACC 421 Week Three (Week 3)
Exercise 18-4 (E18-4) (Recognition of Profit on Long-Term Contracts) During 2007 Pierson Company started a construction job with a contract price of $1,500,000. The job was completed in 2009. The following information is available.
2007 2008 2009
Costs incurred to date $400,000 $935,000 $1,070,000
Estimated costs to complete 600,000 165,000 –0–
Billings to date 300,000 900,000 1,500,000
Collections to date 270,000 810,000 1,425,000
Instructions
(a) Compute the amount of gross profit to be recognized each year assuming the percentage-of-completion method is used.
(b) Prepare all necessary journal entries for 2008.
(c) Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used.
Click here for the solution: (Recognition of Profit on Long-Term Contracts) During 2007 Pierson Company started a construction job with a contract price of $1,500,000
Exercise 18-4 (E18-4) (Recognition of Profit on Long-Term Contracts) During 2007 Pierson Company started a construction job with a contract price of $1,500,000. The job was completed in 2009. The following information is available.
2007 2008 2009
Costs incurred to date $400,000 $935,000 $1,070,000
Estimated costs to complete 600,000 165,000 –0–
Billings to date 300,000 900,000 1,500,000
Collections to date 270,000 810,000 1,425,000
Instructions
(a) Compute the amount of gross profit to be recognized each year assuming the percentage-of-completion method is used.
(b) Prepare all necessary journal entries for 2008.
(c) Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used.
Click here for the solution: (Recognition of Profit on Long-Term Contracts) During 2007 Pierson Company started a construction job with a contract price of $1,500,000
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