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Accounting 23rd Edition Carl S. Warren - Solutions
=+Factory Overhead July 1 Balance 22,000 July 31 Factory overhead applied (E)31 Indirect labor (H)31 Indirect materials 16,000 31 Other overhead 95,000 In addition, the following information is available:a. Materials and direct labor were applied to six jobs in July:Job No. Style Quantity Direct
=+PR 19-3A Job order cost sheet objs. 2, 3 Chapter 19 Job Order Costing 887 Big Wave Company manufactures surf boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for July:Materials July 1 Balance 30,000 July 31
=+40 meters at $12 per meter . . . . . . . . . . . . . . . . . . . . . . . . $ 480.00 Estimated direct labor:24 hours at $15 per hour. . . . . . . . . . . . . . . . . . . . . . . . . . . 360.00 Estimated factory overhead (50% of direct labor cost). . . . . . . . 180.00 _________ Total estimated
=+PR 19-2A Entries and schedules for unfinished jobs and completed jobs obj. 2✔ 3. Work in Process balance, $22,290 If the working papers correlating with the textbook are not used, omit Problem 19-3A.Lynch Furniture Company refinishes and reupholsters furniture. Lynch uses a job order cost
=+2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as dates. Insert memo account balances as of the end of the month.
=+1. Journalize the entries to record the summarized operations.
=+g. Jobs were shipped and customers were billed as follows: Job 201, $6,540; Job 202,$8,820; Job 203, $11,880.Instructions
=+e. The factory overhead rate is $50 per machine hour. Machine hours used:Job Machine Hours No. 201 18 No. 202 30 No. 203 24 No. 204 75 No. 205 33 No. 206 20 ____ Total 200 ____ ____f. Jobs completed: 201, 202, 203, and 205.
=+d. Depreciation of machinery and equipment, $1,560.
=+Staircase Equipment Company uses a job order cost system. The following data summarize the operations related to production for April 2010, the first month of operations:a. Materials purchased on account, $23,400.b. Materials requisitioned and factory labor used:Job Materials Factory Labor No.
=+PR 19-1A Entries for costs in a job order cost system obj. 2 June 30. Paid professional salaries of $180,000 for the month.30. Billed Rucker $380,000 for successful defense of the case.a. Provide the journal entries for each of the above transactions.b. How much office overhead is over- or
=+i. Cost of goods sold, $715,000.Instructions Journalize the entries to record the summarized operations.
=+e. Prepaid expenses expired for factory overhead were $14,500; for selling expenses,$12,300; and for administrative expenses, $8,900.f. Depreciation of office building was $42,000; of office equipment, $21,500; and of factory equipment, $14,500.g. Factory overhead costs applied to jobs,
=+d. Other costs incurred on account were for factory overhead, $128,600; selling expenses, $116,400; and administrative expenses, $72,500.
=+c. Factory labor used, $324,500, of which $45,500 was indirect.
=+b. Materials requisitioned, $275,000, of which $35,000 was for general factory use.
=+EX 19-18 Job order cost accounting entries for a service business obj. 4✔d. Dr. Cost of Services, $777,500 Problems Series A Keltner Co. uses a job order cost system. The following data summarize the operations related to production for November:a. Materials purchased on account, $350,000.
=+At the end of June, both the Clinton Bank and Pryor Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account.Journalize the summary entry to record each of the following for the month:a. Direct labor costsb. Media purchasesc. Overhead
=+June 1 Balances Clinton Bank $80,000 Pryor Airlines 24,000 O’Ryan Hotels 56,000 Marshall Beverages 34,000 During June, The Ad Guys incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:Direct Labor Media Purchases Clinton
=+EX 19-17 Job order cost accounting entries for a service business obj. 4 Chapter 19 Job Order Costing 885 The Ad Guys Inc. provides advertising services for clients across the nation. The Ad Guys is presently working on four projects, each for a different client. The Ad Guys accumulates costs
=+30. Paid secretarial and administrative salaries of $35,000 for the month.30. Used office supplies for the month, $12,000.
=+24. Applied office overhead at a rate of $55 per professional hour charged to the Rucker case.
=+16. Received invoice from consultants Wenzel and Lachgar for $64,000 for expert testimony related to the Rucker trial.
=+8. Reimbursed travel costs to employees for depositions related to the Rucker case, $21,000.12. Charged 300 hours of professional time for the Rucker trial at a rate of $260 per hour.
=+EX 19-16 Decision making with job order costs obj. 3 The consulting firm of Tilton and Henderson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during June:June 4. Charged 600 hours of professional (lawyer) time to the
=+b. What improvements would you recommend for Duncan Trophies Inc.?
=+Plaques shipped ÷ 60 ________ Cost per plaque $ 101.00 ________ ________ Job 212 May 6 Cost per Unit Units Job Cost Direct materials:Wood $32.00/unit 48 units $ 1,536 Brass 24.00/unit 48 units 1,152 Engraving labor 60.00/hr. 28 hrs. 1,680 Assembly labor 45.00/hr. 14 hrs. 630 Factory overhead
=+During the first half of the year, the university had two separate executive education classes. The job cost sheets for the two separate jobs indicated the following information:Job 201 April 12 Cost per Unit Units Job Cost Direct materials:Wood $32.00/unit 60 units $ 1,920 Brass 24.00/unit 60
=+Each plaque has a brass plate engraved with the name of the participant. Engraving requires approximately 20 minutes per name. Improperly engraved names must be redone.The plate is screwed to a walnut backboard.This assembly takes approximately 10 minutes per unit. Improper assembly must be
=+b. What additional information would you require to investigate Letson Manufacturing’s cost performance more precisely?Duncan Trophies Inc. uses a job order cost system for determining the cost to manufacture award products (plaques and trophies). Among the company’s products is an engraved
=+EX 19-15 Decision making with job order costs obj. 3 884 Chapter 19 Job Order Costinga. Develop a graph for each product (three graphs), with Job No. (in date order) on the horizontal axis and unit cost on the vertical axis. Use this information to determine Letson Manufacturing’s cost
=+EX 19-14 Financial statements of a manufacturing firm obj. 2✔a. Income from operations, $99,600 Letson Manufacturing Inc. is a job shop. The management of Letson Manufacturing uses the cost information from the job sheets to assess their cost performance. Information on the total cost, product
=+b. Determine the inventory balances at the end of the first month of operations.
=+a. Prepare the May income statement for Salsa. Assume that Salsa uses the perpetual inventory method.
=+EX 19-13 Entries for factory costs and jobs completed obj. 2✔d. $31,160 The following events took place for Salsa Inc. during May 2010, the first month of operations as a producer of road bikes:• Purchased $244,000 of materials.• Used $210,000 of direct materials in production.• Incurred
=+b. Direct and indirect labor used.c. Factory overhead applied (a single overhead rate is used based on direct labor cost).d. Completion of Jobs 10 and 11.
=+Direct materials 12,400 Direct materials 5,800 Direct labor 4,750 Direct labor 2,450 Factory overhead 3,800 Factory overhead 1,960 Total 20,950 Total 10,210 Job 12 Job 13 Direct materials 17,400 Direct materials 3,500 Direct labor 5,250 Direct labor 700 Factory overhead Factory overhead
=+EX 19-12 Entry for jobs completed; cost of unfinished jobs obj. 2✔b. $13,500 Chapter 19 Job Order Costing 883 Munch Printing Inc. began printing operations on July 1. Jobs 10 and 11 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs
=+b. Determine the cost of the unfinished jobs at January 31.
=+EX 19-11 Predetermined factory overhead rate obj. 2✔a. $205 per hour The following account appears in the ledger after only part of the postings have been completed for January:Work in Process Balance, January 1 $ 14,200 Direct materials 115,400 Direct labor 124,500 Factory overhead 65,400 Jobs
=+c. During November, the operating room was used 192 hours. The actual overhead costs incurred for November were $38,500. Determine the overhead under- or overapplied for the period.
=+b. Gretchen Kelton had a 6-hour procedure on November 10. How much operating room overhead would be charged to her procedure, using the rate determined in part (a)?
=+EX 19-10 Predetermined factory overhead rate obj. 2 The Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and
=+Administrative office depreciation expense 10,000 __________ Total costs and expenses $1,827,800 __________ __________ The average shop direct labor rate is $16 per hour.Determine the predetermined shop overhead rate per direct labor hour.
=+EX 19-9 Factory overhead rates, entries, and account balance obj. 2✔b. $40.00 per direct labor hour 882 Chapter 19 Job Order Costing Willies Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as
=+d. Determine the balances of the factory accounts for each factory as of June 30, and indicate whether the amounts represent overapplied or underapplied factory overhead.
=+c. Journalize the entries to apply factory overhead to production in each factory for June.
=+b. Determine the factory overhead rate for Factory 2.
=+Factory 1 Factory 2 Estimated factory overhead cost for fiscal year beginning June 1 $475,000 $600,000 Estimated direct labor hours for year 15,000 Estimated machine hours for year 20,000 Actual factory overhead costs for June $38,000 $52,000 Actual direct labor hours for June 1,350 Actual
=+EX 19-8 Entries for direct labor and factory overhead obj. 2 Hudson Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factory overhead costs, direct labor hours,
=+b. Journalize the entry to apply factory overhead to production for August.
=+EX 19-7 Entry for factory labor costs obj. 2 Moura Industries Inc. manufactures recreational vehicles. Moura uses a job order cost system. The time tickets from August jobs are summarized below.Job 410 $3,400 Job 411 1,700 Job 412 1,400 Job 413 2,500 Factory supervision 1,900 Factory overhead is
=+b. Assume that Jobs 201 and 202 were completed but not sold during the week and that Job 203 remained incomplete at the end of the week. How would the direct labor costs for all three jobs be reflected on the financial statements at the end of the week?
=+a. Journalize the entry to record the factory labor costs for the week.
=+The process improvement category includes training, quality improvement, housekeeping, and other indirect tasks.
=+d. Explain how the materials ledger might be used as an aid in maintaining inventory quantities on hand.Chapter 19 Job Order Costing 881 The weekly time tickets indicate the following distribution of labor hours for three direct labor employees:Hours Process Job 201 Job 202 Job 203 Improvement
=+EX 19-6 Entry for factory labor costs obj. 2a. Complete the materials issuances and balances for the wire cable subsidiary ledger under FIFO.b. Determine the balance of wire cable at the end of May.c. Journalize the summary entry to transfer materials to work in process.
=+EX 19-5 Entries for materials obj. 2✔c. fabric, $33,500 A summary of the time tickets for the current month follows:Job No. Amount Job No. Amount 201 $ 2,100 220 $3,650 204 1,750 224 2,240 205 3,200 228 1,460 Indirect labor 11,200 236 9,875 Journalize the entry to record the factory labor costs.
=+c. Determine the June 30 balances that would be shown in the materials ledger accounts.
=+b. Journalize the entry to record the requisition of materials in June.
=+a. Journalize the entry to record the purchase of materials in June.
=+Polyester Fabric Filling Lumber Glue Total Job 101 $ 47,500 $ 60,000 $160,000 $267,500 Job 102 36,500 54,000 140,000 230,500 Job 103 33,500 44,000 78,000 155,500 Factory overhead—indirect materials _________ _________ ________ $13,000 13,000 _______ ________ Total $117,500 $158,000 $378,000
=+EX 19-4 Entry for issuing materials obj. 2 Bullock Furniture Company manufactures furniture. Bullock uses a job order cost system. Balances on June 1 from the materials ledger are as follows:Fabric $25,000 Polyester filling 7,500 Lumber 56,000 Glue 2,400 The materials purchased during June are
=+EX 19-3 Cost of materials issuances under the FIFO method obj. 2✔b. $1,320 880 Chapter 19 Job Order Costing Materials issued for the current month are as follows:Requisition No. Material Job No. Amount 101 Steel 210 $25,400 102 Plastic 215 19,600 103 Glue Indirect 1,450 104 Rubber 222 1,200 105
=+EX 19-2 Cost flow relationships obj. 2✔c. $630,000 An incomplete subsidiary ledger of wire cable for May is as follows:RECEIVED ISSUED BALANCE Receiving Materials Report Unit Requisition Unit Number Quantity Price Number Quantity Amount Date Quantity Amount Price May 1 300 $2,400 $8.00 24 210
=+a. Cost of goods soldb. Direct materials costc. Direct labor cost
=+EX 19-1 Transactions in a job order cost system obj. 2 The following information is available for the first month of operations of Url Inc., a manufacturer of art and craft items:Sales $1,200,000 Gross profit 320,000 Indirect labor 110,000 Indirect materials 45,000 Other factory overhead 20,000
=+PE 19-6B Cost of goods sold obj. 2 EE 19-6 p. 868 878 Chapter 19 Job Order Costing Chapter 19 Job Order Costing 879 Exercises Five selected transactions for the current month are indicated by letters in the following T accounts in a job order cost accounting system:Describe each of the five
=+PE 19-6A Cost of goods sold obj. 2 EE 19-6 p. 868 Suo Company completed 20,000 units during the year at a cost of $120,000. The beginning finished goods inventory was 2,500 units at $14,000. Determine the cost of goods sold for 12,000 units, assuming a FIFO cost flow.
=+PE 19-5B Job costs obj. 2 EE 19-5 p. 867 Luek Company completed 60,000 units during the year at a cost of $900,000. The beginning finished goods inventory was 10,000 units at $140,000. Determine the cost of goods sold for 45,000 units, assuming a FIFO cost flow.
=+PE 19-5A Job costs obj. 2 EE 19-5 p. 867 At the end of June, Lewis Company had completed Jobs 30 and 32. Job 30 is for 1,600 units, and Job 32 is for 1,750 units. Using the data from Practice Exercises 19-1B, 19-2B, and 19-4B, determine (a) the balance on the job cost sheets for Jobs 30 and 32 at
=+PE 19-4B Applying factory overhead obj. 2 EE 19-4 p. 864 At the end of May, Thomson Company had completed Jobs 70 and 71. Job 70 is for 8,000 units, and Job 71 is for 10,000 units. Using the data from Practice Exercises 19-1A, 19-2A, and 19-4A, determine (a) the balance on the job cost sheets for
=+PE 19-4A Applying factory overhead obj. 2 EE 19-4 p. 864 Lewis Company estimates that total factory overhead costs will be $200,000 for the year.Direct labor hours are estimated to be 25,000. For Lewis Company, (a) determine the predetermined factory overhead rate, (b) determine the amount of
=+PE 19-3B Factory overhead costs obj. 2 EE 19-3 p. 862 Thomson Company estimates that total factory overhead costs will be $600,000 for the year. Direct labor hours are estimated to be 250,000. For Thomson Company, (a) determine the predetermined factory overhead rate, (b) determine the amount of
=+PE 19-3A Factory overhead costs obj. 2 EE 19-3 p. 862 During June, Lewis Company incurred factory overhead costs as follows: indirect materials, $6,000; indirect labor, $7,600; utilities cost, $3,200; and factory depreciation$7,200. Journalize the entry to record the factory overhead incurred
=+PE 19-2B Direct labor costs obj. 2 EE 19-2 p. 861 During May, Thomson Company incurred factory overhead costs as follows: indirect materials, $24,500; indirect labor, $64,500; utilities cost, $5,800; and factory depreciation,$45,200. Journalize the entry to record the factory overhead incurred
=+PE 19-2A Direct labor costs obj. 2 EE 19-2 p. 861 Practice Exercises During June, Lewis Company accumulated 1,200 hours of direct labor costs on Job 30 and 1,300 hours on Job 32. The total direct labor was incurred at a rate of $16 per direct labor hour for Job 30 and $14 per direct labor hour
=+PE 19-1B Issuance of materials obj. 2 EE 19-1 p. 859 During May, Thomson Company accumulated 10,000 hours of direct labor costs on Job 70 and 12,000 hours on Job 71. The total direct labor was incurred at a rate of $18 per direct labor hour for Job 70 and $20 per direct labor hour for Job 71.
=+PE 19-1A Issuance of materials obj. 2 EE 19-1 p. 859 On June 2, Lewis Company purchased 4,000 units of raw materials at $8 per unit. On June 12, raw materials were requisitioned for production as follows: 1,200 units for Job 30 at $6 per unit and 800 units for Job 32 at $8 per unit. Journalize
=+On May 21, raw materials were requisitioned for production as follows: 22,000 units for Job 70 at $5 per unit and 24,000 units for Job 71 at $6 per unit. Journalize the entry on May 9 to record the purchase and on May 21 to record the requisition from the materials storeroom.
=+On May 9, Thomson Company purchased 54,000 units of raw materials at $6 per unit.
=+17. Describe how a job order cost system can be used for professional service businesses.
=+16. How can job cost information be used to identify cost improvement opportunities?
=+15. What account is the controlling account for (a) the materials ledger, (b) the job cost sheets, and (c) the finished goods ledger?
=+ What procedure can be used for disposing of the balance in the account?
=+14. At the end of the fiscal year, there was a relatively minor balance in the factory overhead account.
=+c. If the factory overhead account has a credit balance at the end of the first month of the fiscal year, where will the amount of this balance be reported on the interim balance sheet?
=+b. If the factory overhead account has a debit balance, was factory overhead underapplied or overapplied?
=+13.a. What is (1) overapplied factory overhead and (2) underapplied factory overhead?
=+b. Name three common bases used in calculating the rate.
=+12.a. How is a predetermined factory overhead rate calculated?
=+11. Discuss how the predetermined factory overhead rate can be used in job order cost accounting to assist management in pricing jobs.
=+10. Describe the source of the data for debiting Work in Process for (a) direct materials, (b) direct labor, and (c) factory overhead.
=+b. Why should the total time reported on an employee’s time tickets for a payroll period be compared with the time reported on the employee’s clock cards for the same period?
=+9.a. Differentiate between the clock card and the time ticket.
=+8. What is a job cost sheet?
=+7. What document is the source for (a) debiting the accounts in the materials ledger and (b) crediting the accounts in the materials ledger?
=+6. How does the use of the materials requisition help control the issuance of materials from the storeroom?
=+5. Which account is used in the job order cost system to accumulate direct materials, direct labor, and factory overhead applied to production costs for individual jobs?
=+4. Hewlett-Packard Company assembles ink jet printers in which a high volume of standardized units are assembled and tested. Is the job order cost system appropriate in this situation?
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