The University of Chicago Press is wholly owned by the university. It performs the bulk of its

Question:

The University of Chicago Press is wholly owned by the university. It performs the bulk of its work for other university departments, which pay as though the press were an outside business enterprise. The press also publishes and maintains a stock of books for general sale. The press uses normal costing to cost each job. Its job- costing system has two direct- cost categories (direct materials and direct manufacturing labor) and one indirect- cost pool (manufacturing overhead, allocated on the basis of direct manufacturing labor costs).

The following data (in thousands) pertain to 2012:

Direct materials and supplies purchased on credit........... $ 820

Direct materials used ......................750

Indirect materials issued to various production departments....... 120

Direct manufacturing labor ...................1,360

Indirect manufacturing labor incurred by various production departments.. 930

Depreciation on building and manufacturing equipment........ 440

Miscellaneous manufacturing overhead* incurred by various production departments

(ordinarily would be detailed as repairs, photocopying, utilities, etc.)..... 540

Manufacturing overhead allocated at 150% of direct manufacturing labor costs. ?

Cost of goods manufactured..................... 4,100

Revenues .............................8,200

Cost of goods sold (before adjustment for under- or overallocated manufacturing

overhead) Inventories, December 31, 2011 (not 2012):......... 4,030

Materials Control......................... 150

Work- in- Process Control .....................80

Finished Goods Control...................... 540


Required

1. Prepare an overview diagram of the job- costing system at the University of Chicago Press.

2. Prepare T- accounts to record the 2012 transactions for inventories, revenues, and costs. As your final entry, dispose of the year- end under- or overallocated manufacturing overhead as a writeoff to Cost of Goods Sold. Number your entries.

3. How did the University of Chicago Press perform in 2012?


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