The job cards are read and summarized to create the WIP account Cornerstones of

# The job cards are read and summarized to create the

• Notes
• 50
• 81% (79) 64 out of 79 people found this document helpful

This preview shows page 46 - 50 out of 50 pages.

materials, labor, and overhead applied to each job. The job cards are read and summarized to create the WIP account.
Cornerstones of Cost Management Hansen 2nd Edition Test Bank Cornerstones of Cost Management Hansen 2nd Edition Test Bank 144. a. Factory overhead rate = \$96,000/4,000 = \$24 per direct labor hour b. Costs assigned to Job XX: materials \$10,600 direct labor (100 ´ \$30*) 3,000 factory overhead applied (100 ´ \$24) 2,400 work in process, April 30, 2014 \$16,000 * \$120,000/4000 = \$30 per hour c. \$X + \$120,000 +\$96,000 + \$20,000 - \$16,000 = \$400,000 X = \$180,000 145. a. \$240,000/8,000 = \$30 b. Job 10 Job 11 Job 12 Total Work in process, Nov. 1 \$16,000 \$26,000 \$38,000 \$80,000 Materials requisitioned \$ 4,000 \$ 4,800 \$ 7,200 \$16,000 Direct labor cost \$ 2,400 \$ 3,600 \$ 4,000 \$10,000 Overhead applied: Machine hours 400 ´ \$30 \$12,000 700 ´ \$30 \$21,000 900 ´ \$30 \$27,000 total 34,400 55,400 76,200 c. Finished goods \$110,600 Work in process \$110,600 job 10 + job 12 = 34,400 + 76,200 = \$110,600 (the cost of goods manufactured) d. record a sale Cash \$50,000 Sales \$50,000 Cost of goods sold \$34,400 Finished goods \$34,400 Sales \$50,000 CGS 34,400 Gross Profit \$15,600 e. Job 11 is still in production = \$55,400 f. Finished goods has one job - job 12 = \$76,200 g. Actual overhead \$61,000 Applied overhead (12,000 + 21,000 + 27,000 )= \$60,000 Underapplied overhead \$ 1,000
Cornerstones of Cost Management Hansen 2nd Edition Test Bank Cornerstones of Cost Management Hansen 2nd Edition Test Bank 146. a. Underapplied by \$22,000 The actual costs were \$22,000 greater than those applied to work-in-process. b. Cost of Goods Sold 22,000 Factory Overhead 22,000 c. Work in Process (35,000/200,000) 3,850 Finished Goods (65,000/200,000) 7,150 Cost of Goods Sold (100,000/200,000) 11,000 Factory Overhead 22,000 147. a. Factory Overhead 63,000 Cost of Goods Sold 63,000 b. Factory Overhead 63,000 Work in Process (120/450) 16,800 Finished Goods (150/450) 21,000 Cost of Goods Sold (180/450) 25,200 c. When the amount of overapplied or underapplied overhead is immaterial, writing it off to Cost of Goods Sold is sufficient. If the amount is material, allocating the amount to the two inventories (WIP and FG) and Cost of Goods Sold is preferable. 148. a. Work-in-Process 6,000 Materials 6,000 Work-in-Process 2,850 Wages Payable 2,850 Work-in-Process 1,425 Factory Overhead 1,425 b. Finished Goods 10,275 Work-in-Process 10,275 c. \$1,425/\$2,850 = 50% of direct labor costs d. Accounts Receivable 16,440 Sales 16,440 Cost of Goods Sold 10,275 Finished Goods 10,275 149. a. Overhead rates if Stainless Steel uses 1. a plantwide rate based on direct labor hours; \$225,000/15,000 = \$15.00 DLH 2. a plantwide rate based on machine hours; \$225,000/30,000 = \$7.50 MH 3. departmental rates with department A based on direct labor hours and department B using machine hours. A \$50,000/10,000 = \$5 DLH B \$175,000/25,000 = \$7 MH b. The variation in the cost per unit is due to the variation in consumption.
Cornerstones of Cost Management Hansen 2nd Edition Test Bank Cornerstones of Cost Management Hansen 2nd Edition Test Bank 150. a. Materials 156,800 Accounts Payable 156,800 b. Work-in-Process 70,000 Materials 70,000 c. Work-in-Process (2,000 ´ \$14) 28,000 Factory Overhead (500 ´ \$14) 7,000 Wages Payable 35,000 d. Factory Overhead 7,000 Materials 7,000 e. Factory Overhead 14,000 Accumulated Depreciation 14,000 f. Factory Overhead 5,600 Various Accounts 5,600 g. Work-in-Process (28,000 ´ 125%) 35,000 Factory Overhead 35,000 h. Finished Goods 84,000 Work-in-Process 84,000 i. Cash 77,000 Sales 77,000 Cost of Goods Sold 49,000 Finished Goods Inventory 49,000 151. 1. Activity Cost Amount of Driver Activity rate setups \$ 120,000 6,000 \$ 20 purchasing 80,000 20,000 4 other overhead 150,000 75,000 2 2. Job 1001 Job 1002 Job 1003 Job 1004 Total Balance 9/1 \$44,900 \$60,700 \$30,500 0 136,100 dm 54,000 37,000 25,000 41,000 157,000 dl 80,000 38,500 43,000 71,000 232,500 # setups \$20 ( 40) 800 (10) 200 (30) 600 (200) 4,000 5,600 # parts \$4 (300) 1,200 (180) 720 (400) 1,600 (500) 2,000 5,520 dlhours \$2 (5,000) 10,000 (2,400) 4,800 (5,200) 10,400 (1,200) 2,400 27,600 TOTAL \$190,900 \$141,920 \$111,100 \$120,400 \$564,320
Cornerstones of Cost Management Hansen 2nd Edition Test Bank Cornerstones of Cost Management Hansen 2nd Edition Test Bank 6. WIP ___________________________________________ BI 136,100 | 302,000 DM 157,000 | DL 232,500 | MOH 38,720 | _________________ |__________________________ EI 262,320 STATEMENT OF COST OF GOODS MANUFACTURED Lowland Corporation Month of September Direct materials used in production \$157,000 Direct labor 232,500 Manufacturing overhead applied 38,720 Total manufacturing costs added 428,220 Add: beginning work in process 136,100 Less: ending work in process 262,320 Cost of Goods manufactured 302,000