ACC 406 Lecture 5: Week 5 - Ch. 5
Document Summary
Get access
Related Documents
Related Questions
Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $600,000, and factory payroll cost in April is $390,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $29,000; factory rent, $34,000; factory utilities, $21,000; and factory equipment depreciation, $61,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $670,000 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 | $ | 28,000 | $ | 39,000 | ||||||||
| Direct labor | 24,000 | 18,000 | ||||||||||
| Applied overhead | 12,000 | 9,000 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 133,000 | 220,000 | $ | 115,000 | ||||||||
| Direct labor | 105,000 | 154,000 | 102,000 | |||||||||
| Applied overhead | ? | ? | ? | |||||||||
| Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
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).
2. Prepare journal entries for the month of April to record the below transactions. (Hint, there are 13 steps)
Materials purchases (on credit).
Direct materials used in production.
Direct labor paid and assigned to Work in Process Inventory.
Indirect labor paid and assigned to Factory Overhead.
Overhead costs applied to Work in Process Inventory.
Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
Transfer of Jobs 306 and 307 to Finished Goods Inventory.
Cost of goods sold for Job 306.
Revenue from the sale of Job 306.
Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Case 3-49
Avid Assemblers uses normal job-order costing to assign costs toproducts. The company assembles and packages 25 different productsaccording to customer specifications. Products are worked on inbatches of 20 to 40 units. Each batch is given a job number. OnOctober 1, the company had the following balances:
| Raw materials | $9,800 | |
| Work in process | 65,847 | |
| Finished goods | 30,640 |
Work in process consisted of the following jobs:
| Job 22 | Job 24 | Job 25 | |||||
| Direct materials | $6,200 | $5,190 | $4,800 | ||||
| Direct labour | 10,500 | 9,210 | 9,500 | ||||
| Applied overhead | 7,350 | 6,447 | 6,650 | ||||
| Total | $24,050 | $20,847 | $20,950 | ||||
| Number of units | 20 | 40 | 30 |
Finished goods consisted of Job 23, with the following costs:
| Job 23 | ||
| Direct materials | $8,200 | |
| Direct labour | 13,200 | |
| Applied overhead | 9,240 | |
| Total | $30,640 | |
| Number of units | 50 |
Shown below are the direct cost data related to jobs started inOctober:
| Job 26 | Job 27 | Job 28 | Total | ||||||
| Direct materials | $5,180 | $5,600 | $4,200 | $14,980 | |||||
| Direct labour | 11,200 | 9,340 | 5,910 | 26,450 | |||||
| Number of units | 20 | 30 | 20 |
Other information:
| 1. | Direct materials and direct labour added tobeginning work in process in October were as follows:
| |||||||||||||||||||||||||||||||||||
| 2. | Overhead is applied at a predetermined rate basedon the direct labour cost. | |||||||||||||||||||||||||||||||||||
| 3. | Actual expenses for October were as follows:
* 80% of employer contributions and benefits relate to factorypersonnel. | |||||||||||||||||||||||||||||||||||
| 4. | Purchases of direct materials (raw materials)during October amounted to $28,500. Indirect materials (supplies)are handled in a separate account. | |||||||||||||||||||||||||||||||||||
| 5. | Only Job Nos. 27 and 28 are still in process atclosing on October 31. Finished goods consisted only of Job No. 25at month end. | |||||||||||||||||||||||||||||||||||
6. | Avid writes off any under- and over-applied overhead to Cost ofGoods Sold in the month in which it is incurred. Requirements: | |||||||||||||||||||||||||||||||||||
a.Calculate Predetermined overhead rate
b.Calculate Unit cost of job 24 in October
c.Calulate the Oct 31 Balances for the following account:
Raw Materials, Work in Process, Finished Goods
d.What is the cost of goods manufactured?
e. Determine the under- or over- paid in October
Prepare the journal entry to dispose of this amount.
Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $22,000; factory rent, $36,000; factory utilities, $25,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 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 | $ | 29,000 | $ | 36,000 | ||||||||
| Direct labor | 24,000 | 15,000 | ||||||||||
| Applied overhead | 12,000 | 7,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 135,000 | 215,000 | $ | 115,000 | ||||||||
| Direct labor | 103,000 | 151,000 | 103,000 | |||||||||
| Applied overhead | ? | ? | ? | |||||||||
| Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
Problem 19-1A 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).
Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $22,000; factory rent, $36,000; factory utilities, $25,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 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 | $ | 29,000 | $ | 36,000 | ||||||||
| Direct labor | 24,000 | 15,000 | ||||||||||
| Applied overhead | 12,000 | 7,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 135,000 | 215,000 | $ | 115,000 | ||||||||
| Direct labor | 103,000 | 151,000 | 103,000 | |||||||||
| Applied overhead | ? | ? | ? | |||||||||
| Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
Problem 19-1A Part 2
Materials purchases (on credit).
Direct materials used in production.
Direct labor paid and assigned to Work in Process Inventory.
Indirect labor paid and assigned to Factory Overhead.
Overhead costs applied to Work in Process Inventory.
Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
Transfer of Jobs 306 and 307 to Finished Goods Inventory.
Cost of goods sold for Job 306.
Revenue from the sale of Job 306.
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. 1-13
Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $22,000; factory rent, $36,000; factory utilities, $25,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 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 | $ | 29,000 | $ | 36,000 | ||||||||
| Direct labor | 24,000 | 15,000 | ||||||||||
| Applied overhead | 12,000 | 7,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 135,000 | 215,000 | $ | 115,000 | ||||||||
| Direct labor | 103,000 | 151,000 | 103,000 | |||||||||
| Applied overhead | ? | ? | ? | |||||||||
| Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
Problem 19-1A Part 3
3. Prepare a schedule of cost of goods manufactured.
Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $22,000; factory rent, $36,000; factory utilities, $25,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 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 | $ | 29,000 | $ | 36,000 | ||||||||
| Direct labor | 24,000 | 15,000 | ||||||||||
| Applied overhead | 12,000 | 7,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 135,000 | 215,000 | $ | 115,000 | ||||||||
| Direct labor | 103,000 | 151,000 | 103,000 | |||||||||
| Applied overhead | ? | ? | ? | |||||||||
| Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
Problem 19-1A Part 4
4.1 Compute gross profit for April.
4.2 Show how to present the inventories on the April 30 balance sheet.
