1. Costs are accumulated and summarized by department in a job order cost system. T/F
2. As jobs are completed, their costs become part of finished goods inventory. T/F
3. A materials requisition is used as the basis for a journal entry that records the issuance of materials. T/F
4. A predetermined factory overhead rate is calculated by dividing the estimated activity base by the estimated total factory overhead costs. T/F
5. A debit balance in the factory overhead account is called over-applied factory overhead. T/F
1. Costs are accumulated and summarized by department in a job order cost system. T/F
2. As jobs are completed, their costs become part of finished goods inventory. T/F
3. A materials requisition is used as the basis for a journal entry that records the issuance of materials. T/F
4. A predetermined factory overhead rate is calculated by dividing the estimated activity base by the estimated total factory overhead costs. T/F
5. A debit balance in the factory overhead account is called over-applied factory overhead. T/F
Related questions
Entries and Schedules for Unfinished Jobs and Completed Jobs
Tybee Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January, the first month of operations:
Materials purchased on account, $1,870.
Materials requisitioned and factory labor used:
| Job | Materials | Factory Labor | ||
| 301 | $2,300 | $2,400 | ||
| 302 | 2,810 | 3,240 | ||
| 303 | 1,860 | 1,580 | ||
| 304 | 6,300 | 5,950 | ||
| 305 | 4,000 | 4,540 | ||
| 306 | 2,920 | 2,880 | ||
| For general factory use | 780 | 3,550 | ||
Factory overhead costs incurred on account, $4,390.
Depreciation of machinery and equipment, $1,700.
The factory overhead rate is $40 per machine hour. Machine hours used:
| Job | Machine Hours | ||
| 301 | 36 | ||
| 302 | 15 | ||
| 303 | 42 | ||
| 304 | 74 | ||
| 305 | 38 | ||
| 306 | 41 | ||
| Total | 246 | ||
Jobs completed: 301, 302, 303, and 305.
Jobs were shipped and customers were billed as follows: Job 301, $7,370; Job 302, $7,980; Job 303, $14,850.
Required:
1. Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank.
| Entries | Description | Debit | Credit |
|---|---|---|---|
| a. | Materials | ||
| Accounts Payable | |||
| b. | Work in Process | ||
| Factory Overhead | |||
| c. | Factory Overhead | ||
| Accounts Payable | |||
| d. | Factory Overhead | ||
| Accumulated Depreciation-Machinery and Equipment | |||
| e. | Work in Process | ||
| Factory Overhead | |||
| f. | Finished Goods | ||
| Work in Process | |||
| g. | Accounts Receivable | ||
| Sales | |||
| Cost of Goods Sold | |||
| Finished Goods |
2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month.
| Work in Process | |||
|---|---|---|---|
| (b) | (f) | ||
| (e) | |||
| Bal. | |||
| Finished Goods | |||
|---|---|---|---|
| (f) | (g) | ||
| Bal. | |||
3. Prepare a schedule of unfinished jobs to support the balance in the work in process account.
| Tybee Industries Inc. Schedule of Unfinished Jobs | ||||||||
|---|---|---|---|---|---|---|---|---|
| Job | Direct Materials | Direct Labor | Factory Overhead | Total | ||||
| No. 304 | $ | $ | $ | $ | ||||
| No. 306 | ||||||||
| Balance of Work in Process, January 30 | $ | |||||||
4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.
| Tybee Industries Inc. Schedule of Completed Jobs | ||||||||
|---|---|---|---|---|---|---|---|---|
| Job | Direct Materials | Direct Labor | Factory Overhead | Total | ||||
| Finished Goods, January 30 (Job 305) | $ | $ | ||||||
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.
[The following information applies to the questions displayed below.]
Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 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 | $ | 27,000 | $ | 45,000 | ||||||||
| Direct labor | 21,000 | 19,000 | ||||||||||
| Applied overhead | 10,500 | 9,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 139,000 | 215,000 | $ | 105,000 | ||||||||
| Direct labor | 103,000 | 152,000 | 104,000 | |||||||||
| 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).
[The following information applies to the questions displayed below.]
Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 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 | $ | 27,000 | $ | 45,000 | ||||||||
| Direct labor | 21,000 | 19,000 | ||||||||||
| Applied overhead | 10,500 | 9,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 139,000 | 215,000 | $ | 105,000 | ||||||||
| Direct labor | 103,000 | 152,000 | 104,000 | |||||||||
| 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.
[The following information applies to the questions displayed below.]
Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 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 | $ | 27,000 | $ | 45,000 | ||||||||
| Direct labor | 21,000 | 19,000 | ||||||||||
| Applied overhead | 10,500 | 9,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 139,000 | 215,000 | $ | 105,000 | ||||||||
| Direct labor | 103,000 | 152,000 | 104,000 | |||||||||
| 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.
[The following information applies to the questions displayed below.]
Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 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 | $ | 27,000 | $ | 45,000 | ||||||||
| Direct labor | 21,000 | 19,000 | ||||||||||
| Applied overhead | 10,500 | 9,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 139,000 | 215,000 | $ | 105,000 | ||||||||
| Direct labor | 103,000 | 152,000 | 104,000 | |||||||||
| Applied overhead | ? | ? | ? | |||||||||
| Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
Problem 19-1A Part 4
4.1 Compute gross profit for April.
