ACCT1022 Lecture Notes - Lecture 2: Finished Good
Get access
Related Documents
Related Questions
Garrett Company makes sailboats. they use normal costmeasurement, and accumulate product costs costing. The followinginformation is available about their most reacent year.
Raw Material, Beginning | $800 |
Raw Material Ending | $1,500 |
Raw Materials Purchased | $60,000 |
Estimate Overhead | $90,000 |
Actual Overhead | $91,000 |
Estimated Machine Hours | 1,800 |
Direct Labor Rate | $12 per hour |
Garret had no balance in WIP Inventory or Finished GoodsInventory at the beginning of the current year.
During the current year, Garret start 3 jobs. Job 1-01 required$14,000 of direct materials, 2,000 labor hours, and 600 machinehours. Job 4-01 required $25,000 of direct materials, 2,500 laborhours, and 920 machine hours. Job 11-01 is in process at the end ofthe year. As of the end of the year, Job 11-01 has required $18,000of direct materials, 850 labor hours, and 220 machine hours.
During the year, $2,650 worth of indirect materials wereactually used in production.
Job 1-02 was sold during the current year for a total of$120,000. Job 4-01 has a buyer, but the boat will not actually besold until next quarter, so Garrett is carrying the cost of theboat in Finished Goods Inventory.
A. Calculate Garrett's pre-determined overhead rate for theaccounting period.
B. Journalize the transactions that occurred during the year.Including material purchased, requisition of raw materials, use ofdirect labor, application of overhead, actual manifacturingoverhead, transferof finished goods, sale of boat, and the cost ofgoods sold.
C. Post the journal entried in B. Calculate the amount of overor under applied overhead.
D. Calculate Garrett's gross margin.
Sweeten Company had no jobs in progress at the beginning ofMarch and no beginning inventories. It started only two jobs duringMarchâJob P and Job Q. Job P was completed and sold by the end ofthe March and Job Q was incomplete at the end of the March. Thecompany uses a plantwide predetermined overhead rate based ondirect labor-hours. The following additional information isavailable for the company as a whole and for Jobs P and Q (all dataand questions relate to the month of March): |
Estimated totalfixed manufacturing overhead | $ | 11,500 |
Estimated variable manufacturingoverhead per direct labor-hour | $ | 1.30 |
Estimated total directlabor-hours to be worked | 2,300 | |
Total actual manufacturingoverhead costs incurred | $ | 14,000 |
Job P | Job Q | |||
Direct materials | $ | 14,500 | $ | 8,300 |
Direct labor cost | $ | 19,600 | $ | 9,100 |
Actual direct labor-hoursworked | 1,400 | 650 | ||
2. How much manufacturing overhead was applied to Job P and JobQ? (Round your intermediate calculations to 2 decimal places.)
3.
What is the direct labor hourly wage rate
4-a.
If Job P includes 20 units, what is its unit product cost?
4-b.
What is the total amount of manufacturing cost assigned to Job Qas of the end of March (including applied overhead)?
5.
Assume the ending raw materials inventory is $1,300 and thecompany does not use any indirect materials. Prepare the journalentries to record raw materials purchases and the issuance ofdirect materials for use in production. (If no entry is requiredfor a transaction/event, select "No journal entry required" in thefirst account field.)
6.
Assume that the company does not use any indirect labor. Preparethe journal entry to record the direct labor costs added toproduction. (If no entry is required for a transaction/event,select "No journal entry required" in the first accountfield.)v
7.
Prepare the journal entry to apply manufacturing overhead coststo production. (If no entry is required for a transaction/event,select "No journal entry required" in the first account field.)
8.
Assume the ending raw materials inventory is $1,300 and thecompany does not use any indirect materials. Prepare a schedule ofcost of goods manufactured.
9.
Prepare the journal entry to transfer costs from Work in Processto Finished Goods. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.
10.
Prepare a completed Work in Process T-account including thebeginning and ending balances and all debits and credits posted tothe account.
11
Prepare a schedule of cost of goods sold
12.
Prepare the journal entry to transfer costs from Finished Goodsto Cost of Goods Sold. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
13.
What is the amount of underapplied or overapplied overhead?
14.
Prepare the journal entry to close the amount of underapplied oroverapplied overhead to Cost of Goods Sold. (If no entry isrequired for a transaction/event, select "No journal entryrequired" in the first account field.
15.
Assume that Job P includes 20 units that each sell for $3,500and that the companyâs selling and administrative expenses in Marchwere $20,500. Prepare an absorption costing income statement forMarch.