Sampson Company uses a job order cost system with overhead applied to products based on direct labor
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Question:
Sampson Company uses a job order cost system with overhead applied to products based on direct
labor hours. Based on previous history, the company estimated its total overhead for the coming
year to be $ and its total direct labor hours to be
On January the general ledger of Sampson Company revealed that it had one
job in process Job for which it had incurred a total cost of $ Job had been
finished the previous month for a total cost of $ but was not yet sold. The company had
a contract for Job but had not started working on it yet. Other balances in Raw Materials
Inventory and other assets, liabilities, and stockholders equity accounts are summarized on
the next page.
Assignment
ACC Fall
Required
Answer the questions following the case in one report. Ensure that each question is well labeled and provide
one document only that includes all answers.
The report should include your name and student number on the first page or a cover page
Due Dec at midnight Please upload the completed report onto the Assignment
location on blackboard. This is the same location where you are able to view the
assignment
SAMPSON COMPANY
General Ledger Accounts
Raw Materials Inventory
Balance
Manufacturing Overhead
Work in Process Inventory WIP
Balance
Finished Goods Inventory
Balance
Individual Job Cost Sheets subsidiary ledgers to WIP
Job Job
Beg. Balance
Direct Materials
Direct Labor
Applied OH
Total Mfg Cost
Cost of Goods Sold
Sales Revenue Selling, General, and Administrative Expenses
Cash and Other Assets
Balance
Payables and Other Liabilities
Balance
Stockholders Equity
Balance
During January, the company had the following transactions:
a Purchased $ worth of raw materials on account.
b Issued the following materials into production:
Item Cost Explanation
Direct materials $ Job $; Job $
Indirect materials Used on both jobs
Total materials issued $
c Recorded salaries and wages payable as follows:
Item Cost Explanation
Direct labor $ Job $; Job $
Indirect labor For factory supervision
Salaries For administrative staff
Total payroll cost $
d Applied overhead to jobs based on the number of direct labor hours required:
Job Number Direct Labor Hours
Job hours
Job hours
Total hours
e Recorded the following actual manufacturing costs:
Item Cost Explanation
Rent $ Paid factory rent in cash
Depreciation Factory equipment
Insurance Had one month of factory insurance policy expire
Utilities Received factory utility bill but did not pay it
Total cost $
f Recorded the following general and administrative costs:
Item Cost Explanation
Advertising $ Advertising paid in cash
Depreciation Office equipment
Other expenses Micellaneous expenses incurred but not paid
Total cost $
g Sold Job which is recorded in Finished Goods Inventory at a cost of $ for $
h Completed Job but did not sell it; Job is still in process at yearend.
Required:
Compute and interpret the predetermined overhead rate.
How much overhead would be applied to jobs during the period?
Compute the total cost of Jobs and at the end of the period. Where would the cost
of each of these jobs appear on the yearend balance sheet?
Prepare journal entries to record the January transactions and post the entries to the general
ledger Taccounts given earlier in the problem.
Calculate the amount of over or underapplied overhead.
Prepare the journal entry to dispose of the overhead balance assuming that it had been a year
end balance instead of a monthend balance. Post the effect to the general ledger Taccounts.
Prepare a statement of cost of goods manufactured report including the adjustment for over
or underapplied overhead.
Prepare a brief income statement for Sampson Company.
Please note that you do not need to include the Tac
Posted Date: