ACC 406 Chapter : track.doc

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blacksardine128

22 Apr 2012

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All product costs i. e. , all manufacturing costs are charged to inventory prior to their being expensed at the point of sale. Direct labor i. e. , the cost of the employees who actually work on the product is charged to the work-in-process (wip) account when the work is performed not when the employee is paid. The other side of the entry is typically wages payable. All other costs of manufacture such as factory rent, depreciation on manufacturing equipment, and the salaries of supervisors are collected in an overhead account. The opposite side of these entries might be rent payable, accumulated depreciation, and salaries payable. The overhead is then applied i. e. , charged to the product using an appropriate base, typically hours taken to produce the product. In the application process, costs are transferred from the overhead account to the wip account. The result is the full cost of inventory.

Related Questions

Zachary Modems, Inc. acquired a subsidiary named Anywhere, Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones. The following trial balance was drawn from the accounts of the subsidiary:


Cash	$	184,600
Raw materials inventory		3,680
Work in process inventory		5,530
Finished goods inventory		6,450
Common stock			$	119,060
Retained earnings				81,200
Totals	$	200,260	$	200,260

The subsidiary completed the following transactions during 2017:

1. Paid $55,380 cash for direct raw materials.

2. Transferred $46,160 of direct raw materials to work in process.

3. Paid production employees $73,860 cash.

4. Applied $48,910 of manufacturing overhead costs to work in process.

5. Completed work on products that cost $150,410.

6. Sold products that cost $131,950 for $167,950 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b.

7. Paid $18,450 cash for selling and administrative expenses.

8. Actual overhead costs paid in cash amounted to $50,710.

9. Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial).

10. Made a $4,580 cash distribution to the owners

REQUIRED

A. Prepare a schedule of cost of goods manufactured and sold.

ANYWHERE, INC.
Schedule of Cost of Goods Manufactured and Sold
For Year Ended December, 31 2017
Beginning raw materials inventory
Purchases
Raw materials available for use	0
Ending raw materials inventory
Direct raw materials used	0
Direct labor
Manufacturing overhead
Total manufacturing costs	0
Beginning work in process inventory
Total work in process inventory	0
Ending work in process inventory
Cost of goods manufactured	0
Beginning finished goods inventory
Cost of goods available for sale	0
Ending finished goods inventory
Cost of goods sold	$0

coffeegoose683

Chesapeake Sailmakers uses job ordercosting. Manufacturing overhead is charged to individualjobs through the use of a predetermined overhead ratebased on direct labor costs. The following informationappears in the company's Work in Process Inventoryaccount for the month of June:


Debits to account:
Balance, June1	$	7,200
Directmaterials		13,000
Directlabor		9,200
Manufacturingoverhead (applied to jobs as 150% of direct labor cost)		14,000

Totaldebits to account	$	43,400
Credits to account:
Transferredto Finished Goods Inventory account		33,200

Balance, June 30	$	10,200

a.	Assuming that the direct laborcharged to the jobs still in process at June 30 amountsto $2,100, compute the amount of manufacturing overhead andthe amount of direct materials that have been charged tothese jobs as of June 30. (Omit the "$" sign in yourresponse.)


Manufacturing overhead applied to jobs	$
Direct materials charged to jobs	$

b.	Prepare general journal entries to summarize:(Omit the "$" signin your response.)
	1.	The manufacturing costs (directmaterials, direct labor, and overhead) charged to production duringJune.
	2.	The transfer of production completedduring June to the Finished Goods Inventory account.
	3.	The cash sale of 90percent of the merchandise completed during June ata total sales price of $46,000. Show the related cost ofgoods sold in a separate journal entry.

	General Journal	Debit	Credit
1.	choose one: land, manufacturingoverhead, work in progress inventory, direct labor, finish goodinventory, sales, cash, materials inventory, accounts payable,materials inventory, rental equipment, wages expense, costs ofgoods sold,
	choose one: same choicesas above.
	choose one: same choices asabove.
	choose one: samechoices as above.

2.	choose one: same choices asabove.
	choose one: same choicesas above.

3.	choose one: same choices asabove.
	choose one:same choices as above.

	choose one: same choices asabove.
	chooseone: same choices as above.

The following beginning and ending inventory balances apply toXYZâs 2009 accounting period:

Numbers are shown as Beginning, Ending
Raw Materials Inventory $24,000, $22,000
Work in Process Inventory $32,000, $33,000
Finished Goods Inventory $20,000, $17,000

During 2009, the company purchased $234,000 of direct rawmaterials. It incurred $180,000 of direct labor costs for the yearand allocated $260,000 of manufacturing overhead costs to work inprocess. There was no overapplied or underapplied overhead. Revenuefrom goods sold during the year was $800,000.

The amount of cost of goods manufactured (amount transferred fromWIP to Finished Goods) was what?

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ACC 406 Chapter : track.doc

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