Flow of Costs with Proration and 100% COGS Adjustments

James Michael schedules autograph signings for football fans and creates posters to sell at each

signing. James uses a normal-costing system with two direct cost pools, labor and materials, and

one indirect cost pool, general overhead. General overhead is allocated to each signing based on

70% of labor cost. Actual overhead equaled allocated overhead in April 2023. Actual overhead in

May was $1,000. All costs incurred during the planning stage for a signing and during the

signing are gathered in a balance sheet account called “Signings in Progress (SIP.)” When a

signing is completed, the costs are transferred to an income statement account called, “Cost of

Completed Signing (CCS).” Following is cost information for May, 2023:

	From Beginning SIP				Incurred in May
Athlete	Materials	Labor	Overhead		Materials	Labor	Overhead
Benji Binkleman	$500	$800	?		$300	$200	?
Ravi Patel	$300	$1,000	?		$700	$200	?
Rebecca Rampton	$600	$500	?		$500	$900	?

The signings for Benji Binkleman and Ravi Patel were completed in May.

a.Calculate the SIP at the end of May.

b. Calculate the CCS for May.

c. Calculate the under/overallocated overhead at the end of May.

d.Calculate the ending balances in SIP and CCS if the under/overallocated overhead

amount is as follows:

i. Written off to CCS

ii. Prorated based on the ending balances (before proration) in SIP

and CCS.

Answer rating: 100% (QA)

To solve the given problem we need to follow the provided instructions step by step Lets start solving each part of the question a Calculate the SIP at the end of May First we need to calculate the ov... View the full answer