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Managerial Accounting 1B
Financial and Managerial Accounting
Chapter 15
1.
Exercise 15-4 Analysis of cost flows L.O. C2, P1, P2, P3
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As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs. |
Job 102
Job 103
Job 104
Direct materials
30,000
$ 66,000
$ 54,000
Direct labor
16,000
28,400
42,000
Overhead
8,000
14,200
21,000
| Job 102 |
| 1. |
What is the cost of the raw materials requisitioned in June for each of the three jobs? (Omit the “$” sign in your response.) |
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Job 102 |
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Job 103 |
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Job 104 |
| 2. |
How much direct labor cost is incurred during June for each of the three jobs? (Omit the “$” sign in your response.) |
| 3. |
What predetermined overhead rate is used during June? (Omit the “%” sign in your response.) |
|
Predetermined overhead rate |
| 4. |
How much total cost is transferred to finished goods during June? (Omit the “$” sign in your response.) |
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Total transferred cost |
$ |
2.
Exercise 15-6 Analysis of costs assigned to goods in process L.O. P3
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Lopez Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year-end, the Goods in Process Inventory account shows the following. |
Date
Explanation
Debit
Credit
Balance
2011
Dec. 31
Direct materials cost
1,500,000
1,500,000
31
Direct labor cost
240,000
1,740,000
31
Overhead costs
4
50,000
2,1
90,000
To finished goods
2,
100,000
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Determine the overhead rate used (based on direct material cost). (Omit the “%” sign in your response.) |
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Overhead rate |
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Only one job remained in the goods in process inventory at December 31, 2011. Its direct materials cost is $30,000. How much direct labor cost and overhead cost are assigned to it? (Omit the “$” sign in your response.) |
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Direct labor cost |
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Overhead cost |
3.
Exercise 15-7 Cost flows in a job order cost system L.O. P1, P2, P3, P4
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The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system. |
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April 30 |
May 31 |
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Inventories |
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Raw materials |
40,000 |
50,000 | ||||||||||||
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Goods in process |
9,600 |
19,500 |
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Finished goods |
60,000 |
33,200 |
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Activities and information for May |
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Raw materials purchases (paid with cash) |
18 9,000 |
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Factory payroll (paid with cash) |
400,000 |
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Factory overhead |
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Indirect materials |
12,000 | |||||||||||||
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Indirect labor |
75,000 |
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Other overhead costs |
100,500 |
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Sales (received in cash) |
1,200,000 |
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Predetermined overhead rate based on direct labor cost |
65 | % |
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Compute the following amounts for the month of May. (Input all amounts as positive values. Omit the “$” sign in your response.) |
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Cost of direct materials used. |
|
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Cost of direct labor used. |
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Cost of goods manufactured. |
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Cost of goods sold.* |
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| 5. |
Gross profit. |
| 6. |
___________________ |
4.
Exercise 15-8 Journal entries for materials L.O. P1
The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system. April 30 May 31 Inventories Raw materials $ 40,000 $ 50,000 Goods in process 9,600 19,500 Finished goods 60,000 33,200 Activities and information for May Raw materials purchases (paid with cash) 189,000 Factory payroll (paid with cash) 400,000 Factory overhead Indirect materials 12,000 Indirect labor 75,000 Other overhead costs 100,500 Sales (received in cash) 1,200,000 Predetermined overhead rate based on direct labor cost 65 %
|
Raw materials purchases for cash. |
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Direct materials usage. |
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Indirect materials usage. |
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Prepare journal entries for the above events for the month of May. (Omit the “$” sign in your response.) |
5.
Exercise 15-9 Journal entries for labor L.O. P2
The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system. April 30 May 31 Inventories Raw materials $ 40,000 $ 50,000 Goods in process 9,600 19,500 Finished goods 60,000 33,200 Activities and information for May Raw materials purchases (paid with cash) 189,000 Factory payroll (paid with cash) 400,000 Factory overhead Indirect materials 12,000 Indirect labor 75,000 Other overhead costs 100,500 Sales (received in cash) 1,200,000 Predetermined overhead rate based on direct labor cost 65 %
|
Factory payroll costs in cash. |
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Direct labor usage. |
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Indirect labor usage. |
Prepare journal entries for the above events for the month of May. (Omit the “$” sign in your response.)
6.Exercise 15-10 Journal entries for overhead L.O. P3
The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system. April 30 May 31 Inventories Raw materials $ 40,000 $ 50,000 Goods in process 9,600 19,500 Finished goods 60,000 33,200 Activities and information for May Raw materials purchases (paid with cash) 189,000 Factory payroll (paid with cash) 400,000 Factory overhead Indirect materials 12,000 Indirect labor 75,000 Other overhead costs 100,500 Sales (received in cash) 1,200,000 Predetermined overhead rate based on direct labor cost 65 %
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Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts). |
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Application of overhead to goods in process. |
Prepare journal entries for the above events for the month of May. (Omit the “$” sign in your response.)
7. Exercise 15-11 Adjusting factory overhead L.O. P4
The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system. April 30 May 31 Inventories Raw materials $ 40,000 $ 50,000 Goods in process 9,600 19,500 Finished goods 60,000 33,200 Activities and information for May Raw materials purchases (paid with cash) 189,000 Factory payroll (paid with cash) 400,000 Factory overhead Indirect materials 12,000 Indirect labor 75,000 Other overhead costs 100,500 Sales (received in cash) 1,200,000 Predetermined overhead rate based on direct labor cost 65 %
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Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.(Omit the “$” sign in your response.) |
Problem 15-1A Production costs computed and recorded; reports prepared L.O. C2, P1, P2, P3, P4
[The following information applies to the questions displayed below.]
| Winfrey Co.’s March 31 inventory of raw materials is $150,000. Raw materials purchases in April are $400,000, and factory payroll cost in April is $220,000. Overhead costs incurred in April are: indirect materials, $30,000; indirect labor, $
14,000 ; factory rent, $20,000; factory utilities, $12,000; and factory equipment depreciation, $30,000. The predetermined overhead rate is 50% of direct labor cost. |
Job 306 |
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Job 307 |
Job 308 |
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Balances on March 31 |
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Direct materials |
14,000 |
18,000
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Direct labor |
18,000 |
16,000 |
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Applied overhead |
9,000 |
8,000 |
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Costs during April |
|||
| 100,000 |
170,000 |
80,000 |
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| 30,000 |
56,000 |
120,000 |
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| ? | |||
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Status on April 30 |
Finished (sold) |
Finished (unsold) |
In process |
8.
Problem 15-1A Part 1
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Required: |
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Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31). (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response. ) |
9.
Problem 15-1A Part 2
| a. |
Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.) |
| b. |
Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory. |
| c. |
Transfer of Jobs 306 and 307 to the Finished Goods Inventory. |
| d. |
Cost of goods sold for Job 306. |
| e. |
Revenue from the sale of Job 306. |
| f. |
Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.) |
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Prepare journal entries for the month of April to record the above transactions. (Omit the “$” sign in your response.) |
10.
Problem 15-1A Part 3
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Prepare a manufacturing statement for April (use a single line presentation for direct materials and show the details of overhead cost.) (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.) |
11.
Problem 15-1A Part 4
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4.1 |
Compute gross profit for April. (Omit the “$” sign in your response.) |
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Gross profit |
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4.2 |
Show how to present the inventories on the April 30 balance sheet. (Omit the “$” sign in your response.) |
| Raw materials |
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Goods in process (Job 308) |
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Finished goods (Job 307) |
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Total inventories |
