36Accounting - 2 Award 10.00 points Problems Adjust credit...

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Unformatted text preview: 2. Award: 10.00 points Problems? Adjust credit for all students. The following information is from the materials requisitions and time tickets for Job 9­1005 completed by Great Bay Boats. The requisitions are identified by code numbers starting with the letter Q and the time tickets start with W. At the start of the year, management estimated that overhead cost would equal 110% of direct labor cost for each job. Date Document 7/1/2013 Q­4698 7/1/2013 W­3393 7/5/2013 Q­4725 7/5/2013 W­3479 7/10/2013 W­3559 Amount $ 1,250 600 1,000 450 300 Determine the total cost on the job cost sheet for Job 9­1005. JOB COST SHEET Direct Materials Direct Labor Date Requisition No. 07/01/2013 Q­4698 $ 1,250 W­3393 $ 600 07/05/2013 Q­4725 1,000 W­3479 450 W­3559 07/10/2013 Amount $ 2,250 Time­Ticket No. Overhead Amount $ 1,350 660 495 300 $ Total Cost Costs Applied 330 $ 1,485 $ Explanation: JOB COST SHEET: Job 9­1005 Direct materials cost Q­4698 $ 1,250 Q­4725 1,000 $ Direct labor cost W­3393 600 W­3479 450 W­3559 300 Overhead ($1,350 × 110%) Total cost $ References Expanded table 2,250 1,350 1,485 5,085 eBook & Resources Difficulty: Easy Learning Objective: 19­C2 Explain job cost sheets and how they are used in job order cost accounting. 5,085 3. Award: 10.00 points Problems? Adjust credit for all students. The titles of documents and accounts used in job order cost accounting are given in dropdown. The short descriptions of the purposes of the documents is also given. Match each short description with the document. Short Description Title of Documents or Accounts 1. Shows amount of time an employee works on a job. Time ticket 2. Temporarily accumulates the cost of incurred overhead until the cost is assigned to specific jobs. Factory overhead account 3. Temporarily accumulates incurred labor costs until they are assigned to specific jobs or to overhead. Factory payroll account 4. Communicates the need for materials to complete a job. Materials requisition 5. Shows only total time an employee works each day. Clock card 6. Shows amount approved for payment of an overhead or other cost. Voucher 7. Perpetual inventory record of raw materials received, used, and available for use. Materials ledger card Explanation: No further explanation details are available for this problem. References eBook & Resources Worksheet Learning Objective: 19­ P1 Describe and record the flow of materials costs in job order cost accounting. Difficulty: Easy Learning Objective: 19­ P2 Describe and record the flow of labor costs in job order cost accounting. Learning Objective: 19­P3 Describe and record the flow of overhead costs in job order cost accounting. 4. Award: 10.00 points Problems? Adjust credit for all students. As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs. Direct materials Direct labor Overhead Job 102 Job 103 Job 104 $ 15,000 $ 33,000 $ 27,000 8,000 14,200 21,000 4,000 7,100 10,500 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $6,000; direct labor, $1,800; and overhead, $900. Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. No raw materials are used indirectly in June. Using this information, answer the following questions. (Assume this company’s predetermined overhead rate did not change across these months). 1&2. Complete the table below to calculate the cost of the raw materials requisitioned and direct labor cost incurred during June for each of the three jobs. Direct Materials Job 102 May June $ 6,000 Total $ 9,000 $ 15,000 103 33,000 33,000 104 27,000 27,000 Total $ 6,000 $ 69,000 $ 75,000 Direct Labor Job 102 May June $ 1,800 Total $ 6,200 $ 8,000 103 14,200 14,200 104 21,000 21,000 Total $ 1,800 $ 41,400 $ 43,200 3. What predetermined overhead rate is used during June for Job 102? Overhead Rate Choose Numerator: Estimated overhead costs $ 4,000 / Choose Denominator: / Estimated direct labour / $ 8,000 4. How much total cost is transferred to finished goods during June? = Overhead Rate = Overhead rate = 50% Direct Materials Job 102 $ Applied Overhead Direct Labor 15,000 $ 8,000 $ 4,000 Total Cost $ 27,000 103 33,000 14,200 7,100 54,300 104 27,000 21,000 10,500 58,500 $ Total 75,000 $ 43,200 $ 21,600 $ 139,800 Cost Transferred to Finished Goods $ 54,300 $ Explanation: 1. The cost of direct materials requisitioned in the month equals the total direct materials costs accumulated on the three jobs less the amount of direct materials cost assigned to Job 102 in May: Job 102 Less prior costs Job 103 Job 104 Total materials used (requisitioned) $ 15,000 (6,000) $ 9,000 33,000 27,000 $ 69,000 2. Direct labor cost incurred in the month equals the total direct labor costs accumulated on the three jobs less the amount of direct labor cost assigned to Job 102 in May: Job 102 Less prior costs Job 103 Job 104 Total direct labor $ 8,000 (1,800) $ 6,200 14,200 21,000 $41,400 3. The predetermined overhead rate equals the ratio of the amount of overhead assigned to jobs divided by the amount of direct labor cost assigned to them. Since the same rate is used for all jobs started and completed within a month, the ratio for any one job equals the rate that was applied. This table shows the ratio for jobs 102 and 104: Overhead Direct labor Ratio Hints Hint #1 Job 102 Job 104 $ 4,000 $ 10,500 8,000 21,000 50% 50% References eBook & Resources 27,000 81,300 5. Award: 10.00 points Problems? Adjust credit for all students. In December 2012, Shire Computer’s management establishes the year 2013 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $747,500 of overhead costs and $575,000 of direct labor cost in year 2013. During March 2013, Shire began and completed Job No. 13­56. 1. What is the predetermined overhead rate for year 2013? Overhead Rate Choose Numerator: Estimated overhead costs $ 747,500 / Choose Denominator: / Estimated direct labor / $ 575,000 = Overhead Rate = Overhead rate = 2. Use the information on the following job cost sheet. JOB COST SHEET Customer’s Name Keiser Co. Job Description 5 plasma monitors—61 inch Date Mar. 8 Mar. 11 Mar. 18 Totals Direct Materials Requisition No. 4­129 4­142 4­167 Direct Labor Determine the total cost of the job. Total cost of the job $ 22,710 rev: 01_05_2015_QC_CS­3326 Explanation: 2. Direct materials Direct labor Amount Time­Ticket No. Amount $ 5,000 T­306 $ 700 7,020 T­432 1,250 3,330 T­456 1,250 Job No. $ 15,350 3,200 13­56 Overhead Costs Applied Rate Amount 130% Overhead ($3,200 × 130%) Total cost of Job No. 13­56 Hints Hint #1 References 4,160 $ 22,710 eBook & Resources 6. Award: 10.00 points Problems? Adjust credit for all students. Lorenzo Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year­end, the Goods in Process Inventory account shows the following. Date Explanation 2013 Dec. 31 Direct materials cost 31 Direct labor cost 31 Overhead costs 31 To finished goods Debit Credit Balance 1,500,000 1,500,000 300,000 1,800,000 600,000 2,400,000 2,350,000 50,000 1. Determine the overhead rate used (based on direct material cost). Overhead Rate Choose Numerator: Overhead costs $ 600,000 / Choose Denominator: / Direct material costs / $ 1,500,000 = Overhead Rate = Overhead rate = 40% 2. Only one job remained in the goods in process inventory at December 31, 2013. Its direct materials cost is $30,000. How much direct labor cost and overhead cost are assigned to it? Total cost of job in process $ 50,000 Less: Materials cost of job in process 30,000 Less: Overhead applied 12,000 Direct labor cost $ 8,000 Explanation: 2. Less overhead applied (30,000 × 40%) = (12,000) Hints References eBook & Resources Hint #1 7. Award: 10.00 points Problems? Adjust credit for all students. The following information is available for Lock­Safe Company, which produces special­order security products and uses a job order cost accounting system. Inventories Raw materials Goods in process Finished goods Activities and information for May Raw materials purchases (paid with cash) April 30 May 31 $ 43,000 $ 52,000 10,200 21,300 63,000 35,600 210,000 Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost 210,000 345,000 15,000 80,000 120,000 1,400,000 70% Compute the following amounts for the month of May using T­accounts. 1. Cost of direct materials used. 2. Cost of direct labor used. 3. Cost of goods manufactured. 4. Cost of goods sold.* 5. Gross profit. 6. Overapplied or underapplied overhead. *Do not consider any underapplied or overapplied overhead. Raw Materials (RM) Goods in Process (GIP) RM ­ April 30 43,000 15,000 Indirect materials GIP ­ April 30 RM purchases 210,000 186,000 10,200 DM used DM used 186,000 DL used 265,000 Overhead applied 185,500+/-1 GIP ­ May 31 21,300 RM­ May 31 52,000 Factory payroll 345,000 Factory Payroll 265,000 Indirect labor FG ­ April 30 63,000 DL used Cost of goods manuf. 625,400 0 FG ­ May 31 Factory Overhead Indirect materials Indirect labor Other overhead costs 15,000 Sales $ 1,400,000 80,000 Cost of goods sold (652,800) 120,000 Gross profit Overhead applied 29,500 Explanation: 1.Cost of direct materials used Beginning raw materials inventory Plus purchases Raw materials available Less ending raw materials inventory Total raw materials used Less indirect materials used Cost of direct materials used 2.Cost of direct labor used Total factory payroll Less indirect labor Cost of direct labor used $ 43,000 210,000 253,000 (52,000) 3.Cost of goods manufactured Beginning goods in process inventory Plus direct materials Plus direct labor Plus overhead applied (70% of direct labor cost) Total cost of goods in process Less ending goods in process inventory Cost of goods manufactured 4.Cost of goods sold Beginning finished goods inventory Plus cost of goods manufactured Less ending finished goods inventory Cost of goods sold 5.Gross profit Sales Cost of goods sold Gross profit 6.Actual overhead incurred Indirect materials Indirect labor $ 10,200 186,000 265,000 201,000 (15,000) $ 186,000 $ 345,000 (80,000) $ 265,000 185,500 646,700 (21,300) $ 625,400 $ 63,000 625,400 (35,600) $ 652,800 $1,400,000 (652,800) $ 747,200 $ 15,000 80,000 652,800 Cost of goods sold 35,600 Income statement (partial) 185,500 Underapplied OH Cost of goods manuf. Finished Goods (FG) 80,000 625,400 $ 747,200 Indirect labor Other overhead costs Total actual overhead incurred Overhead applied Underapplied overhead Hints Hint #1 References 80,000 120,000 215,000 185,500 $ 29,500 eBook & Resources 8. Award: 10.00 points Problems? Adjust credit for all students. The following information is available for Lock­Safe Company, which produces special­order security products and uses a job order cost accounting system. Inventories Raw materials Goods in process Finished goods Activities and information for May Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost April 30 May 31 $ 43,000 $ 52,000 10,200 21,300 63,000 35,600 210,000 345,000 15,000 80,000 120,000 1,400,000 70% 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. Event 1 General Journal Raw materials inventory Cash 2 Goods in process inventory Factory overhead 210,000 Raw materials inventory 186,000 186,000 Credit 210,000 Raw materials inventory 3 Debit 15,000 15,000 rev: 09_08_2015_QC_CS­23870 Explanation: 2. Beginning raw materials (43,000) + Raw materials purchased (210,000) ­ Indirect materials used (15,000) ­ Ending raw materials (52,000) = $186,000 Hints Hint #1 References eBook & Resources 9. Award: 10.00 points Problems? Adjust credit for all students. The following information is available for Lock­Safe Company, which produces special­order security products and uses a job order cost accounting system. Inventories Raw materials Goods in process Finished goods Activities and information for May Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost April 30 May 31 $ 43,000 $ 52,000 10,200 21,300 63,000 35,600 210,000 345,000 15,000 80,000 120,000 1,400,000 70% 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. Event 1 General Journal Factory payroll Cash 2 3 Debit 345,000 345,000 Goods in process inventory Factory payroll Factory overhead Factory payroll 265,000 265,000 80,000 rev: 09_08_2015_QC_CS­23872, 10_27_2015_QC_CS­31068 Explanation: 2. Direct labor is equal to total payroll (345,000) less Indirect labor (80,000) = $265,000 Hints References eBook & Resources Credit 80,000 Hint #1 ...
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