Managerial accounting 1b – ch15

1.

What is the cost of the raw materials requisitioned in June for each of the three jobs? (Omit the “$” sign in your response.)

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.)

 

4.

How much total cost is transferred to finished goods during June? (Omit the “$” sign in your response.)

 

2.Exercise 15-6 Analysis of costs assigned to goods in process L.O. P3

 

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

450,000  

 

2,190,000  

        31

 To finished goods

 

2,100,000  

90,000  

 

1.

Determine the overhead rate used (based on direct material cost). (Omit the “%” sign in your response.)

2.

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.)

3.Exercise 15-7 Cost flows in a job order cost system L.O. P1, P2, P3, 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

%

Compute the following amounts for the month of May. (Input all amounts as positive values. Omit the “$” sig

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

%

 

1.

Raw materials purchases for cash.

2.

Direct materials usage.

3.

Indirect materials usage.

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

%

 

 

1.

Factory payroll costs in cash.

2.

Direct labor usage.

3.

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

%

 

1.

Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts).

2.

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

%

 

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 is sold for $380,000 cash in April. Costs of the three jobs worked on in April follow.

 

  

 

 

Job 306

Job 307

Job 308

 

  Balances on March 31

 

 

 

 

 

 

 

 

 

 

 

 

      Direct materials

 

$

14,000

 

 

$

18,000 

 

 

 

 

 

      Direct labor

 

 

18,000

 

 

 

16,000 

 

 

 

 

 

      Applied overhead

 

 

9,000

 

 

 

8,000 

 

 

 

 

 

  Costs during April

 

 

 

 

 

 

 

 

 

 

 

 

      Direct materials

 

 

100,000

 

 

 

170,000 

 

 

$

 80,000

 

      Direct labor

 

 

30,000

 

 

 

56,000 

 

 

 

120,000

 

      Applied overhead

 

 

?

 

 

 

?

 

 

 

?

 

  

 

 

 

 

 

 

  Status on April 30

Finished (sold)

 Finished (unsold)

 

In process

 

8.Poblem 15-1A Part 1

 

Required:

1.

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.)

 

2.

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

 

3.

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

 

4.1

Compute gross profit for April. (Omit the “$” sign in your response.)

 

4.2

Show how to present the inventories on the April 30 balance sheet. (Omit the “$” sign in your response.)

 

  

 

 

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