Sally's Sunglasses, a corporation, started a small manufacturing plant that fabricates polarized sunglasses. The manufacturing process...
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Sally's Sunglasses, a corporation, started a small manufacturing plant that fabricates polarized sunglasses. The manufacturing process starts by placing hot melted plastic in molds for the frames. After the molds are cooled, the frames are then prepared for the placement of the lenses. The lens material is a polarized plastic and each sheet of polarized plastic makes one lens. Once the polarized plastic for the lenses is fabricated for the sunglasses the lenses are then secured into the frame, the sunglasses are then inspected, next they are transferred to finished goods. This process is completely automated. Direct material, plastic-frames is added 100% at the beginning of the process. Lenses are added 100% at the end of the process. Conversion costs are added equally throughout the process. Conversion costs are 35% complete for ending inventory in work in process and the lenses are 0% complete as to ending inventory. At the beginning of the accounting period, Sally's Sunglasses estimated that production would be 20,000 sunglasses. Our predetermined factory overhead rate is based on an estimated FOH of $40,000 and the production of 20,000 sunglasses. This information is to be used to determine the application rate for factory overhead. Estimated and actual direct labor costs totaled $28,050. Actual factory overhead costs totaled $36,000. The following information is available concerning direct materials. Direct Materials-Plastic Beginning Inventory Purchase of Plastic Ending Inventory O pounds @ $7.00 per pound 10,000 pounds @ $7.00 per pound O pounds @ $7.00 per pound Each pair of sunglasses contains a half pound of plastic for the frames. The company starts 20,000 sunglasses for the period. Direct Materials-Lenses O sheets of polarized plastic @ 8.31 per sheet 40,000 sheets of polarized plastic @ 8.31 per sheet 4,000 sheets of polarized plastic @ 8.31 per sheet Beginning Inventory Purchases Ending Inventory 1 sheet of polarized plastic makes one lens. The Work-in-Process account has the following information Beginning Work-in-Process contains 0 frames Ending Work-in-Process contains 2,000 frames The Finished Goods account has the following Information Beginning Finished Goods contains 5,400 sunglasses Ending Finished Goods contains 5,900 sunglasses The selling price is $50.00 for each pair of sunglasses. Selling and Administrative Costs totaled $180,000 and the tax rate is 30%. 10. Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Prepare journal entries for the accounting period. Use the account numbers in the chart of accounts, below, instead of the accounts names when writing the journal entries Chart of Accounts 10000 Cash 11000 Accounts Receivable 12000 Plastic Material Inventory 12100 Lens Material Inventory Prepaid Rent Prepaid Insurance 14000 14100 15000 WIP 15050 FOH 16000 FG 20000 Wages Payable 40000 Sales 50000 COGS а. Record the purchase of the materials using cash b. Record the materials transferred to WIP Record the direct labor using cash d. Record the applied FOH Record the actual FOH using cash Record over or under applied FOH g. Record the transfer of goods from WIP to FG h. Record the sale of goods on account Record the cost of the inventory that was sold С. е. f. i. Sally's Sunglasses, a corporation, started a small manufacturing plant that fabricates polarized sunglasses. The manufacturing process starts by placing hot melted plastic in molds for the frames. After the molds are cooled, the frames are then prepared for the placement of the lenses. The lens material is a polarized plastic and each sheet of polarized plastic makes one lens. Once the polarized plastic for the lenses is fabricated for the sunglasses the lenses are then secured into the frame, the sunglasses are then inspected, next they are transferred to finished goods. This process is completely automated. Direct material, plastic-frames is added 100% at the beginning of the process. Lenses are added 100% at the end of the process. Conversion costs are added equally throughout the process. Conversion costs are 35% complete for ending inventory in work in process and the lenses are 0% complete as to ending inventory. At the beginning of the accounting period, Sally's Sunglasses estimated that production would be 20,000 sunglasses. Our predetermined factory overhead rate is based on an estimated FOH of $40,000 and the production of 20,000 sunglasses. This information is to be used to determine the application rate for factory overhead. Estimated and actual direct labor costs totaled $28,050. Actual factory overhead costs totaled $36,000. The following information is available concerning direct materials. Direct Materials-Plastic Beginning Inventory Purchase of Plastic Ending Inventory O pounds @ $7.00 per pound 10,000 pounds @ $7.00 per pound O pounds @ $7.00 per pound Each pair of sunglasses contains a half pound of plastic for the frames. The company starts 20,000 sunglasses for the period. Direct Materials-Lenses O sheets of polarized plastic @ 8.31 per sheet 40,000 sheets of polarized plastic @ 8.31 per sheet 4,000 sheets of polarized plastic @ 8.31 per sheet Beginning Inventory Purchases Ending Inventory 1 sheet of polarized plastic makes one lens. The Work-in-Process account has the following information Beginning Work-in-Process contains 0 frames Ending Work-in-Process contains 2,000 frames The Finished Goods account has the following Information Beginning Finished Goods contains 5,400 sunglasses Ending Finished Goods contains 5,900 sunglasses The selling price is $50.00 for each pair of sunglasses. Selling and Administrative Costs totaled $180,000 and the tax rate is 30%. 10. Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Prepare journal entries for the accounting period. Use the account numbers in the chart of accounts, below, instead of the accounts names when writing the journal entries Chart of Accounts 10000 Cash 11000 Accounts Receivable 12000 Plastic Material Inventory 12100 Lens Material Inventory Prepaid Rent Prepaid Insurance 14000 14100 15000 WIP 15050 FOH 16000 FG 20000 Wages Payable 40000 Sales 50000 COGS а. Record the purchase of the materials using cash b. Record the materials transferred to WIP Record the direct labor using cash d. Record the applied FOH Record the actual FOH using cash Record over or under applied FOH g. Record the transfer of goods from WIP to FG h. Record the sale of goods on account Record the cost of the inventory that was sold С. е. f. i.
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Related Book For
Probability and Statistics
ISBN: 978-0321500465
4th edition
Authors: Morris H. DeGroot, Mark J. Schervish
Posted Date:
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