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Accounting Principles 9th Edition Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso - Solutions
There are two inventory control accounts in a job order system. Identify the control accounts and their subsidiary ledgers.
Tony Andres is confused about the source documents used in assigning materials and labor costs. Identify the documents and give the entry for each document.
Explain how a “materials requisition slip” is used in a job order cost system.
Mel Finney believes actual manufacturing overhead should be charged to jobs. Do you agree? Why or why not?
What relationships are involved in computing a predetermined overhead rate?
How can the agreement of Work in Process Inventory and job cost sheets be verified?
Jeff Gillum is confused about under- and overapplied manufacturing overhead. Define the terms for Jeff, and indicate the balance in the manufacturing overhead account applicable to each term.
At the end of the year, under- or overapplied overhead is closed to Income Summary.” Is this correct? If not, indicate the customary treatment of this amount.
Reyes Tool & Die begins operations on January 1. Because all work is done to customer specifications, the company decides to use a job order cost accounting system. Prepare a flow chart of a typical job order system with arrows showing the flow of costs. Identify the eight transactions.
During January, its first month of operations, Reyes Tool & Die accumulated the following manufacturing costs: raw materials $4,000 on account, factory labor $5,000 of which $4,200 relates to factory wages payable and $800 relates to payroll taxes payable, and utilities payable $2,000. Prepare
In January, Reyes Tool & Die requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600. Prepare a summary journal entry to record raw materials used.
Factory labor data for Reyes Tool & Die is given in BE20-2. During January, time tickets show that the factory labor of $5,000 was used as follows: Job 1 $1,200, Job 2 $1,600 Job 3 $1,400, and general factory use $800. Prepare a summary journal entry to record factory labor used.
Data pertaining to job cost sheets for Reyes Tool & Die are given in BE20-3 and BE20-4. Prepare the job cost sheets for each of the three jobs. (Note: You may omit the column for Manufacturing Overhead.)
Marquis Company estimates that annual manufacturing overhead costs will be $800,000. Estimated annual operating activity bases are: direct labor cost $500,000, direct labor hours 50,000, and machine hours 100,000. Compute the predetermined overhead rate for each activity base.
During the first quarter, Diaz Company incurs the following direct labor costs: January $40,000, February $30,000, and March $50,000. For each month, prepare the entry to assign overhead to production using a predetermined rate of 90% of direct labor cost.
In March, Hollaway Company completes Jobs 10 and 11. Job 10 cost $25,000 and Job 11 $30,000. On March 31, Job 10 is sold to the customer for $35,000 in cash. Journalize the entries for the completion of the two jobs and the sale of Job 10.
At December 31, balances in Manufacturing Overhead are: Lott Company—debit $1,500, Perez Company—credit $900. Prepare the adjusting entry for each company at December 31, assuming the adjustment is made to cost of goods sold.
During the current month, Barnum Company incurs the following manufacturing costs:a. Purchased raw materials of $13,000 on account.b. Incurred factory labor of $40,000. Of that amount, $31,000 relates to wages payable and $9,000 relates to payroll taxes payable.c. Factory utilities of $3,100 are
Fishel Company is working on two job orders. The job cost sheets show the following: Prepare the three summary entries to record the assignment of costs to Work in Process from the data on the job costsheets.
During the current month, Seeza Corporation completed Job 310 and Job 312. Job 310 cost $60,000 and Job 312 cost $40,000. Job 312 was sold on account for $90,000. Journalize the entries for the completion of the two jobs and the sale of Job 312.
For KnightRider Company, the predetermined overhead rate is 150% of direct labor cost. During the month, KnightRider incurred $100,000 of factory labor costs, of which $85,000 is direct labor and $15,000 is indirect labor. Actual overhead incurred was $120,000. Compute the amount of manufacturing
The gross earnings of the factory workers for Brantley Company during the month of January are $60,000. The employer’s payroll taxes for the factory payroll are $8,000. The fringe benefits to be paid by the employer on this payroll are $4,000. Of the total accumulated cost of factory labor, 85%
Milner Manufacturing uses a job order cost accounting system. On May 1, the company has a balance in Work in Process Inventory of $3,200 and two jobs in process: Job No. 429 $2,000, and Job No. 430 $1,200. During May, a summary of source documents reveals the following. Milner Manufacturing
A job order cost sheet for Rolen Company is shown below. Instructions(a) On the basis of the foregoing data answer the following questions.(1) What was the balance in Work in Process Inventory on January 1 if this was the only unfinished job?(2) If manufacturing overhead is applied on the basis of
Manufacturing cost data for Pena Company, which uses a job order cost system, are presented below. InstructionsIndicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is thesame.
Renteria Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $305,000 for the year, and machine usage is estimated at 125,000 hours. For the year, $322,000 of overhead costs are incurred and 130,000 hours are used.Instructions(a)
A job cost sheet of Nilson Company is given below. Instructions(a) Answer the following questions.(1) What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?(2) What is the predetermined manufacturing overhead rate?(3) What are the
Elder Corporation incurred the following transactions.1. Purchased raw materials on account $46,300.2. Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials.3. Factory labor costs
Garnett Printing Corp. uses a job order cost system.The following data summarize the operations related to the first quarter??s production.1. Materials purchased on account $192,000, and factory wages incurred $87,300.2. Materials requisitioned and factory labor used by job: 3. Manufacturing
At May 31, 2010, the accounts of Hannifan Manufacturing Company show the following.1. May 1 inventories—finished goods $12,600, work in process $14,700, and raw materials $8,200.2. May 31 inventories—finished goods $9,500, work in process $17,900, and raw materials $7,100.3. Debit postings to
Tomlin Company begins operations on April 1. Information from job cost sheets shows the following. Job 12 was completed in April. Job 10 was completed in May. Jobs 11 and 13 were completed in June. Each job was sold for 25% above its cost in the month following completion.Instructions(a) What is
Shown below are the job cost related accounts for the law firm of Barnes, King, andMorton and their manufacturing-company equivalents: Cost data for the month of March follow.1. Purchased supplies on account $1,500.2. Issued supplies $1,200 (60% direct and 40% indirect).3. Time cards for the month
Pedro Morales and Associates, a C.P.A. firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November. Overhead costs are applied to jobs on the
Easy Decorating uses a job order costing system to collect the costs of its interior decorating business. Each client’s consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year.Budgeted
Garcia Manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2010, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and
For the year ended December 31, 2010, the job cost sheets of DeVoe Company contained the following data. Other data:1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.2. Finished goods on January 1 consisted of Job No. 7638
Enos Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2010, the general ledger for Enos Inc. contains the following data. Subsidiary data for Work in Process Inventory
Mabry Manufacturing Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the
Vargas Corporation??s fiscal year ends on November 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year. Other data:1. On December 1, two jobs were in process: Job No. 154 and Job No. 155.These jobs had combined direct materials
Michael Ortiz is a contractor specializing in custom-built jacuzzis. On May 1, 2010, his ledger contains the following data.Raw Materials Inventory....... $30,000Work in Process Inventory.......12,200Manufacturing Overhead ........2,500 (dr.)The Manufacturing Overhead account has debit totals of
Elliott Manufacturing uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department A, direct labor hours in Department B, and machine hours in Department C. In establishing the predetermined
Bell Company??s fiscal year ends on June 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year. Other data:1. On July 1, two jobs were in process: Job No. 4085 and Job No. 4086, with costs of $19,000 and $13,200, respectively. 2.
Weinrich Manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor hours. On January 1, 2010, Job No. 25 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $10,000; direct labor $6,000;
For the year ended December 31, 2010, the job cost sheets of Moxie Company contained the following data. Other data:1. Raw materials inventory totaled $20,000 on January 1. During the year, $100,000 of raw materials were purchased on account.2. Finished goods on January 1 consisted of Job No. 7648
Pine Products Company uses a job order cost system. For a number of months there has been an ongoing rift between the sales department and the production department concerning a special-order product, TC-1.TC-1 is a seasonal product that is manufactured in batches of 1,000 units. TC-1 is sold at
In the course of routine checking of all journal entries prior to preparing yearend reports, Diane Riser discovered several strange entries. She recalled that the president’s son Ron had come in to help out during an especially busy time and that he had recorded some journal entries. She was
Founded in 1970, Parlex Corporation is a world leader in the design and manufacture of flexible interconnect products. Utilizing proprietary and patented technologies, Parlex produces custom flexible interconnects including flexible circuits, polymer thick film, laminated cables, and value-added
The Institute of Management Accountants sponsors a certification for management accountants, allowing them to obtain the title of Certified Management Accountant. Address: www.imanet.org, or go to www.wiley.com/college/weygandtSteps1. Go to the site shown above.2. Choose Certification, and then,
You are the management accountant for Newberry Manufacturing. Your company does custom carpentry work and uses a job order cost accounting system. Newberry sends detailed job cost sheets to its customers, along with an invoice. The job cost sheets show the date materials were used, the dollar cost
SEK Printing provides printing services to many different corporate clients. Although SEK bids most jobs, some jobs, particularly new ones, are negotiated on a “cost-plus” basis. Cost-plus means that the buyer is willing to pay the actual cost plus a return (profit) on these costs to SEK.Betty
Many of you will work for a small business. As noted in the All About You feature in this chapter, some of you will even own your own business. In order to operate a small business you will need a good understanding of managerial accounting, as well as many other skills.Much information is
Identify which costing system–job order or process cost–the following companies would primarily use: (a) Quaker Oats, (b) Ford Motor Company, (c) Kinko’s Print Shop, and (d) Warner Bros. Motion Pictures.
What are the similarities between a job order and a process cost system?
Your roommate is confused about the features of process cost accounting. Identify and explain the distinctive features for your roommate.
(a) What source documents are used in assigning (1) materials and (2) labor to production in a process cost system? (b) What criterion and basis are commonly used in allocating overhead to processes?
At Ace Company, overhead is assigned to production departments at the rate of $5 per machine hour. In July, machine hours were 3,000 in the Machining Department and 2,400 in the Assembly Department. Prepare the entry to assign overhead to production.
Gary Weiss is uncertain about the steps used to prepare a production cost report. State the procedures that are required in the sequence in which they are performed.
Rich Mordica is confused about computing physical units. Explain to Rich how physical units to be accounted for and physical units accounted for are determined.
How are equivalent units of production computed?
Mendle Co. had zero units of beginning work in process. During the period 12,000 units were completed, and there were 800 units of ending work in process one-fifth complete as to conversion cost and 100% complete as to materials cost. What were the equivalent units of production for (a) Materials
Reyes Co. started 3,000 units in the period. Its beginning inventory is 500 units one-fourth complete as to conversion costs and 100% complete as to materials cost. Its ending inventory is 200 units one-fifth complete as to conversion cost and 100% complete as to materials costs. How many units
Kiner Company transfers out 14,000 units and has 2,000units of ending work in process that are 25% complete. Materials are entered at the beginning of the process and there is no beginning work in process. Assuming unit materials costs of $3 and unit conversion costs of $6, what are the costs to be
(a) Eve Adams believes the production cost report is an external report for stockholders. Is Eve correct? Explain.(b) Identify the sections in a production cost report.
What purposes are served by a production cost report?
At Frank Company, there are 800 units of ending work in process that are 100% complete as to materials and 40% complete as to conversion costs. If the unit cost of materials is $4 and the costs assigned to the 800 units is $6,000, what is the per-unit conversion cost?
What is the difference between operations costing and a process costing system?
How does a company decide whether to use a job order or a process cost system?
(a) Describe the philosophy and approach of just-in-time processing.(b) Identify the major elements of JIT processing.
(a) What are the principal differences between activity based costing (ABC) and traditional product costing?(b) What assumptions must be met for ABC costing to be useful?
Dipak Co. identifies the following activities that pertain to manufacturing overhead: Materials Handling, Machine Setups, Factory Machine Maintenance, Factory Supervision, and Quality Control. For each activity identify an appropriate cost driver.
(a) Identify the steps that pertain to activity-based costing.(b) What are the advantages of ABC costing?
Sanchez Manufacturing purchases $45,000 of raw materials on account, and it incurs $50,000 of factory labor costs. Journalize the two transactions on March 31 assuming the labor costs are not paid until April.
Data for Sanchez Manufacturing are given in BE21-1. Supporting records show that (a) The Assembly Department used $24,000 of raw materials and $30,000 of the factory labor, and(b) The Finishing Department used the remainder. Journalize the assignment of the costs to the processing departments on
Factory labor data for Sanchez Manufacturing are given in BE21-2. Manufacturing overhead is assigned to departments on the basis of 200% of labor costs. Journalize the assignment of overhead to the Assembly and Finishing Departments.
Bowyer Manufacturing Company has the following production data for selected months. Compute the physical units for eachmonth.
Using the data in BE21-4, compute equivalent units of production for materials and conversion costs, assuming materials are entered at the beginning of the process.
In Montego Company, total material costs are $32,000, and total conversion costs are $54,000. Equivalent units of production are materials 10,000 and conversion costs 12,000. Compute the unit costs for materials, conversion costs, and total manufacturing costs.
Hindi Company has the following production data for April: units transferred out 40,000, and ending work in process 5,000 units that are 100% complete for materials and 40% complete for conversion costs. If unit materials cost is $4 and unit conversion cost is $9, determine the costs to be assigned
Production costs chargeable to the Finishing Department in June in Castilla Company are materials $15,000, labor $29,500, overhead $18,000. Equivalent units of production are materials 20,000 and conversion costs 19,000. Compute the unit costs for materials and conversion costs.
Data for Castilla Company are given in BE21-8. Production records indicate that18,000 units were transferred out, and 2,000 units in ending work in process were 50% complete as to conversion cost and 100% complete as to materials. Prepare a cost reconciliation schedule.
The Smelting Department of Massaro Manufacturing Company has the following production and cost data for November.Production: Beginning work in process 2,000 units that are 100% complete as to materials and20% complete as to conversion costs; units transferred out 8,000 units; and ending work in
Ernie Els has formulated the following list of statements about contemporary developments in managerial accounting. 1. Just-in-time processing results in a push approach; that is, raw materials are pushed through each process.2. A primary objective of just-in-time processing is to eliminate all
Bristol Company identifies three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $120,000, $300,000, and $70,000, respectively. The cost driver for each activity and the expected annual usage are: number of
Boaz Company manufactures CH-21 through two processes: Mixing and Packaging.In July, the following costs were incurred. Units completed at a cost of $21,000 in the Mixing Department are transferred to the Packaging Department. Units completed at a cost of $102,000 in the Packaging Department are
The assembly department has the following production and cost data for the current month. Materials are entered at the beginning of the process. The ending work in process units are 70% complete as to conversion costs. Compute the equivalent units of production for (a) Materials(b) Conversion
In March, Lasso Manufacturing had the following unit production costs: materials $10 and conversion costs $8. On March 1, it had zero work in process. During March, Lasso transferred out 22,000 units. As of March 31, 2,000 units that were 40% complete as to conversion costs and 100% complete as to
Indicate whether each of the following statements is true or false.1. Just-in-time processing is also known as just-in-case processing.2. Companies that use just-in-time processing complete finished goods just in time to be sold.3. A major benefit of just-in-time processing is enhanced product
Doc Gibbs has prepared the following list of statements about process cost accounting.1. Process cost systems are used to apply costs to similar products that are mass-produced in a continuous fashion.2. A process cost system is used when each finished unit is indistinguishable from another.3.
Fernando Company manufactures pizza sauce through two production departments: Cooking and Canning. In each process, materials and conversion costs are incurred evenly throughout the process. For the month of April, the work in process accounts show the following debits. InstructionsJournalize
The ledger of Molindo Company has the following work in process account. Production records show that there were 400 units in the beginning inventory, 30% complete, 1,100 units started, and 1,200 units transferred out. The beginning work in process had materials cost of $2,040 and conversion costs
Douglas Manufacturing Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $4,200, Work in Process-Cutting $2,900, Work in Process-Assembly $10,600, and Finished Goods $31,000. During July, the following transactions occurred.1. Purchased $62,500 of raw
In Ramirez Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion costs, and production data for its Sterilizing Department in selected months during 2010 are as follows. Instructions(a) Compute the physical
The Cutting Department of Groneman Manufacturing has the following production and cost data for July. Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.Instructions(a) Determine the equivalent units of production for (1) materials and
The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2010, the first month of operation.Production: 12,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion
The Blending Department of Hancock Company has the following cost and production data for the month of April. Units transferred out totaled 14,000. Ending work in process was 1,000 units that are 100% complete as to materials and 40% complete as to conversion costs.Instructions(a) Compute the
Podsednik Company has gathered the following informationUnits in beginning work in process ..............–0–Units started into production ..................36,000Units in ending work in process ................6,000Percent complete for conversion costs inending work in process
Pink Martini Company has gathered the following information.Units in beginning work in process ............20,000Units started into production .............72,000Units in ending work in process ............24,000 Percent complete for conversion costs in ending work in process 60%
The Polishing Department of Estaban Manufacturing Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.Production: Beginning inventory 1,600 units that are 100% complete as to materials and 30% complete as to
Stan Maley has recently been promoted to production manager, and so he has just started to receive various managerial reports. One of the reports he has received is the production cost report that you prepared. It showed that his department had 2,000 equivalent units in ending inventory. His
The Welding Department of Batista Manufacturing Company has the following production and manufacturing cost data for February 2010. All materials are added at the beginning of the process. InstructionsPrepare a production cost report for the Welding Department for the month ofFebruary.
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