Background Information I SEE THE LIGHT (ISTL) is a subchapter S corporation that manufactures children's lampsightlights for use in bedrooms. These lamps are sold nationwide through a group of independent sales representatives who have an exclusive sales region. The business is in its tenth year and has asked you to assist in planning for next year's operations. The lamps are ceramic figurines of animals, boats, boys and girls playing and singing, all in delightful colors. The owner of the business, Big Al, creates a drawing for the figurine and faxes it to a plant in China where a mold is created and a sample produced and hand painted. If the mold meets the expectations of Big Al an order of 500 lamp parts is placed. Each lamp kit consists of the parts required to complete one lamp; a figurine, a lamp shade and the required electrical components. There are presently 10 different figurines that come in six different colors; 60 models. There are presently 10 workers in the plant. They are responsible for receiving the raw material, manufacturing the product, packing and shipping. In addition to Big Al there are two office workers who are responsible for all administrative duties. Big Al had his accountant prepare the Projected Income Statement and Balance Sheet presented on page two. Big Al heard about your skills in managerial accounting and would like your assistance in the following areas: Part 1 Process Costing Part 2 Job Order Costing I See The Light Projected Income Statement For the Period Ending December 31, 20x1 I See The Light Projected Balance Sheet As of December 31,201 Current Assets Current Liabilities Accounts Payable \begin{tabular}{ll} $ & 54,000.00 \\ \hline$54,000.00 \end{tabular} Total Liabilities Stockholder's Equity Common Stock $12,000.00 Retained Eamings 147,410.00 Total Stockholder's Equity Total Liabilities and Stockholder's Equity \begin{tabular}{rr} & 159,410.00 \\ \hline$213,410.00 \\ \hline \hline \end{tabular} General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 3,700 figurines at a cost of $62,530.00. Of this amount, $59,200.00 was from raw materials added, $2,220.00 for labor and $1,110.00 for overhead. These 3,700 figurines were assumed to be 30.00% complete as to labor and overhead. During January, 26,000 units were started, $420,940.00 of materials and $49,180.00 of labor costs were incurred. The 5,000 figurines that were in-process at the end of January were assumed to be 20.00% complete to labor and overnead. All figurines in January passed inspection. {12.07} {12.08} {12.09} {12.14} Background Information I SEE THE LIGHT (ISTL) is a subchapter S corporation that manufactures children's lampsightlights for use in bedrooms. These lamps are sold nationwide through a group of independent sales representatives who have an exclusive sales region. The business is in its tenth year and has asked you to assist in planning for next year's operations. The lamps are ceramic figurines of animals, boats, boys and girls playing and singing, all in delightful colors. The owner of the business, Big Al, creates a drawing for the figurine and faxes it to a plant in China where a mold is created and a sample produced and hand painted. If the mold meets the expectations of Big Al an order of 500 lamp parts is placed. Each lamp kit consists of the parts required to complete one lamp; a figurine, a lamp shade and the required electrical components. There are presently 10 different figurines that come in six different colors; 60 models. There are presently 10 workers in the plant. They are responsible for receiving the raw material, manufacturing the product, packing and shipping. In addition to Big Al there are two office workers who are responsible for all administrative duties. Big Al had his accountant prepare the Projected Income Statement and Balance Sheet presented on page two. Big Al heard about your skills in managerial accounting and would like your assistance in the following areas: Part 1 Process Costing Part 2 Job Order Costing I See The Light Projected Income Statement For the Period Ending December 31, 20x1 I See The Light Projected Balance Sheet As of December 31,201 Current Assets Current Liabilities Accounts Payable \begin{tabular}{ll} $ & 54,000.00 \\ \hline$54,000.00 \end{tabular} Total Liabilities Stockholder's Equity Common Stock $12,000.00 Retained Eamings 147,410.00 Total Stockholder's Equity Total Liabilities and Stockholder's Equity \begin{tabular}{rr} & 159,410.00 \\ \hline$213,410.00 \\ \hline \hline \end{tabular} General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 3,700 figurines at a cost of $62,530.00. Of this amount, $59,200.00 was from raw materials added, $2,220.00 for labor and $1,110.00 for overhead. These 3,700 figurines were assumed to be 30.00% complete as to labor and overhead. During January, 26,000 units were started, $420,940.00 of materials and $49,180.00 of labor costs were incurred. The 5,000 figurines that were in-process at the end of January were assumed to be 20.00% complete to labor and overnead. All figurines in January passed inspection. {12.07} {12.08} {12.09} {12.14}