CHAPTER 15 Robert Perez is a contractor specializing in custom-built jacuzzis. On May 1, 2017, his ledger contains the following data 900 Raw Materials Inventory $30,000 Work in Process Inventory 12,200 Manufacturing Overhead 2,500 (dr.) The Manufacturing Overhead account has debit totals of $12,500 and credit totals of $10,000. Subsidiary data for Work in Process Inventory on May 1 include: Job Cost Sheets Job Manufacturing by Customer Direct Materials Direct Labor Overhead Stiner $2,500 $2,000 $1,400 Alton 2,000 1,200 840 Herman 800 560 $5,400 $4,000 $2,800 During May, the following costs were incurred: Raw materials purchased on account $4,000, Labor paid $7,000, and Manufacturing Overhead paid $1,400. A summary of materials requisition slips and time tickets for the month of May reveals the following Job by Customer Materials Requisition Slins Time Tickets Stiner $ 500 $ 400 Alton 600 1,000 Herman 2,300 1,300 Smith 1.900 2300 5,300 5,000 General use 1.500 2.000 $6,800 $7,000 Overhead was charged to jobs on the basis of $0.70 per dollar of direct labor cost. The Jacuzzis for customers Stiner, Alton, and Herman were completed during May. The three Jacuzzis were sold for a During May, the following costs were incurred: Raw materials purchased on account $4,000, Labor paid $7,000, and Manufacturing Overhead paid $1,400. A summary of materials requisition slips and time tickets for the month of May reveals the following. Job by Customer Materials Requisition Slips Time Tickets Stiner $ 500 $ 400 Alton 600 1,000 Herman 2,300 1,300 Smith 1.900 2.300 5,300 5,000 General use 1,500 2.000 $6,800 $7,000 Overhead was charged to jobs on the basis of $0.70 per dollar of direct labor cost. The Jacuzzis for customers Stiner, Alton, and Herman were completed during May. The three Jacuzzis were sold for a total of $36,000 Instructions (a) Prepare Journal entries for the May transactions: for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (80) assignment of raw materials, labor, and overhead to production; and completion of jobs and (m) sale of goods Post the entries to Work in Process Inventory. Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs. (MAKE A SHORT SCHEDULE FOR THIS.) (1) CHAPTER 16 Swinn Company manufactures bicycles. Materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Production and cost data for the month of May are as follows. Percent Production Data --- Bicycles Units Complete Work in process units, May 1 500 80% Units started in production 2,000 Work in process units, May 31 800 40% Cost Data-Bicycles Work in process, May 1 Materials $15,000 Conversion costs 18.000 $33,000 Direct materials 50,000 Direct labor 19,020 Manufacturing overhead 33,680 Instructions (a) Calculate the following (1) The equivalent units of production for materials and conversion (2) The unit costs of production for materials and conversion costs (3) The assignment of costs to units transferred out and in process at the end of the accounting period. (b) Prepare a production cost report for the month of May for the bicycles CHAPTER 17 Luxury Furniture designs and builds factory-made, premium, wood armoires for homes. All are of white oak. Its budgeted manufacturing overhead costs for the year 2014 are as follows. Overhead Cost Pools Amount Purchasing $ 45,000 Handling materials 50,000 Production (cutting, milling, finishing) 130,000 Setting up machines 85,000 Inspecting 60,000 Inventory control (raw materials and finished goods) 80,000 Utilities 100,000 Total budgeted overhead costs $550,000 For the last 4 years, Luxury Furniture has been charging overhead to products on the basis of materials cost. For the year 2017, materials cost of $500,000 were budgeted. Jim Brigham, owner-manager of Luxury Furniture, recently directed his accountant, Bob Borke, to implement the activity-based costing system that he has repeatedly proposed. At Jim Brigham's request, Bob and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools. Expected Use of Overhead Cost Pools Activity Cost Drivers Cost Drivers Purchasing Number of orders Handling materials Number of moves 5,000 Production (cutting, milling, finishing) Direct labor hours 65,000 Setting up machines Number of setups 1,000 Inspecting Number of inspections 4,000 Inventory control (raw materials and finished goods) Number of components 40,000 Utilities Square feet occupied 50,000 500 CHAPTER 17 - CONTINUED Debbie Steiner, sales manager, has received an order for 12 luxury armoires from Thom's Interior Design. At Debbie's request, Bob prepares cost estimates for producing 12 armoires so Debbie can submit a contract price per armoire to Thom's. He accumulates the following data for the production of 12 armoires. Direct materials $5,200 Direct labor $3,500 Direct labor hours 200 Number of purchase orders 3 Number of material moves 32 Number of machine setups 4 Number of inspections 20 Number of components 640 Number of square feet occupied 320 Instructions (a) Compute the predetermined overhead rate using traditional costing with materials cost as the basis. I (6) What is the manufacturing cost per armoire under traditional costing? (c) What is the manufacturing cost per armoire under the proposed activity-based costing? (Prepare all of the necessary schedules.)