chapter 3 solutions

Chapter 3 solutions - CHAPTER 3 Product Costing and Cost Accumulation 3-55(75 MINUTES budgeted manufacturing overhead budgeted direct labor hours

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CHAPTER 3 Product Costing and Cost Accumulation 3-55 (75 MINUTES) 1. hour labor - direct per $22 21,000 $462,000 hours labor - direct budgeted overhead ing manufactur budgeted rate overhead ned Predetermi = = = 2. Journal entries: (a) Raw-Material Inventory . ...................................... 6,000 Accounts Payable . .................................... 6,000 (b) Raw-Material Inventory . ...................................... 5,200 Accounts Payable . .................................... 5,200 (c) Work-in-Process Inventory . ............................... 11,330* Raw-Material Inventory . ........................... 11,330 *(260 sq. m. × $5.50 per sq. m.) + (1,100 kgs. × $9 per kg.) Manufacturing Overhead** . ................................ 120 Manufacturing-Supplies Inventory . ........ 120 **Valve lubricant is an indirect material, so it is considered an overhead cost. (d) Work-in-Process Inventory . ............................... 36,000 Manufacturing Overhead . ................................... 14,100 Wages Payable. ......................................... 50,100 Work-in-Process Inventory . ............................... 39,600* Manufacturing Overhead . ........................ 39,600 *Applied manufacturing overhead = 1,800 direct-labour hours × $22 per hour. (e) Manufacturing Overhead . ................................... 13,000 Accumulated Depreciation: Building and Equipment . ............................................. 13,000
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(f) Manufacturing Overhead . ................................... 1,340 Cash . .......................................................... 1,340 3-55 (CONTINUED) (g) Manufacturing Overhead . ................................... 2,400 Accounts Payable . .................................... 2,400 (h) Manufacturing Overhead . ................................... 2,370 Cash . .......................................................... 2,370 (i) Manufacturing Overhead . ................................... 2,900 Prepaid Insurance . ................................... 2,900 (j) Selling and Administrative Expenses . .............. 7,500 Cash . .......................................................... 7,500 (k) Selling and Administrative Expenses . .............. 4,500 Accumulated Depreciation: Buildings and Equipment . ............................................. 4,500 (l) Selling and Administrative Expenses . .............. 1,150 Cash . .......................................................... 1,150 (m) Finished-Goods Inventory . .............................. 37,130* Work-in-Process Inventory . ................... 37,130 *Cost of Job T79: Direct material (260 × $5.50) . ............... $ 1,430 Direct labour (850 × $20) . ..................... 17,000 Manufacturing overhead (850 × $22) . . 18,700 Total cost . .............................................. $37,130 (n) Accounts Receivable . ....................................... 27,360* Sales Revenue . ......................................... 27,360 *(76 ÷ 2) × $720 per trombone . Cost of Goods Sold . ......................................... 18,565** Finished-Goods Inventory . ...................... 18,565 **18,565 = $37,130 ÷ 2.
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3-55 (CONTINUED) 3. T-accounts and posting of journal entries: Cash Accounts Payable Bal Bal 1,340 (f) 6,000 (a) 2,370 (h) 5,200 (b) 7,500 (j) 2,400 (g) 1,150 (l) Accounts Receivable Wages Payable Bal. Bal. (n) 27,360 50,100 (d) Accumulated Depreciation: Prepaid Insurance Buildings and Equipment Bal. Bal. 2,900 (i) 13,000 (e) 4,500 (k) Manufacturing-Supplies Inventory Manufacturing Overhead Bal. (c) 120 39,600 (d) 120 (c) (d) 14,100 (e) 13,000 (f) 1,340 (g) 2,400 (h) 2,370 (i) 2,900 Raw-Material Inventory Cost of Goods Sold Bal. (n) 18,565 (a) 6,000 11,330 (c) (b) 5,200 Selling and Administrative Work-in-Process Inventory Expenses Bal. (j) 7,500 (c) 11,330 37,130 (m) (k) 4,500 (d) 36,000 (l) 1,150 (d) 39,600
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3-55 (CONTINUED) Finished-Goods Inventory Sales Revenue Bal. 27,360 (n) (m) 37,130 18,565 (n) 4. (a) Calculation of actual overhead: Indirect material (valve lubricant) . ........................................... $ 120 Indirect labour . .......................................................................... 14,100 Depreciation: factory building and equipment . ..................... 13,000 Rent: warehouse . ...................................................................... 1,340 Utilities . ...................................................................................... 2,400 Property taxes . .......................................................................... 2,370 Insurance . .................................................................................. 2,900 Total actual overhead .
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This note was uploaded on 02/18/2012 for the course BUSE 237 taught by Professor Sf during the Spring '12 term at Simon Fraser.

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Chapter 3 solutions - CHAPTER 3 Product Costing and Cost Accumulation 3-55(75 MINUTES budgeted manufacturing overhead budgeted direct labor hours

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