PLEASE USE EXCEL. With the following information, please complete the following
ID: 2399973 • Letter: P
Question
PLEASE USE EXCEL.
With the following information, please complete the following on the spreadsheet provided:
Calculate the predetermined overhead rate as of January 1, 2018.
Fill out the Job Cost Sheet for Job #950. This job was started on November 25, 2018 and represents the entire balance in the WIP account as of November 30, 2018. For this job, Big Papi will produce 1,200 bats. What is his cost / bat for this job?
Complete the journal entries for the month of Dec, 2018 in the general journal.
Determine the amount in Manufacturing Overhead at 12/31/18 and close annual Manufacturing Overhead into Cost of Goods Sold, assuming at November 30, 2018, $1,200,000 of actual expenses had been incurred and $1,205,000 had been applied for the year. Was it over or underapplied? By how much?
Calculate the Gross Profit, Gross Margin, and Net Income before tax for the month of December 2018.
Determine the ending balance in Raw Materials Inventory, Work-in-Process Inventory, and Finished Goods Inventory at December 31, 2018, assuming the following Nov 30, 2018 balances:
Raw Materials = $ 22,300 *
WIP = $ 52,500 **
Finished Goods = $ 8,500
‘* The Raw Materials account contains 20 barrels of glue (total $10,000), 5 barrels of pine tar (total $5,000) and 100 board feet of ash (total $7,300).
** The total in WIP represents 700 bats already completed for job #950. This is representative of $32,500 in direct labor (1,625 hours) and $20,000 of direct materials.
Big Papi, Inc. produces baseball bats for minor league players. Their factory is located in Boston, MA. Before 2018 began, their management made the following estimates for their annual production costs:
Type of Cost Amount
Factory rent $ 90,000
Factory Utilities $ 38,500
Lumber – direct materials $582,000
Factory Insurance $ 24,000
Production Supervisor Salary $110,000
Lathe worker’s wages $141,200
Sanding department wages $ 88,000
Depreciation of Factory $ 75,000
Depreciation of Prod. Equip. $ 42,500
Glue, pine tar – indirect mat. $ 30,000
For the entire year of 2018, Big Papi, Inc. expects to manufacture 9,800 bats. Please apply manufacturing overhead on the basis of direct labor hours (lathe and sanding departments combined). Big Papi expects there to be 40,000 direct labor hours in 2018.
Transactions
For the month of December 2018, Big Papi, Inc. had the following transactions & adjustment:
Dec 3 - Purchased 1,000 board feet of ash lumber on account for $73,000
Dec 5 – Requisitioned 250 board feet of ash lumber, 5 barrels of glue and 2 barrels of pine tar to begin working on 500 additional bats for job #950.
Dec 10 – Paid factory rent of $ 17,500, factory utilities of $ 6,400, and factory insurance of $2,100. All amounts are paid in cash.
Dec 15 – Incurred and paid direct labor to Lathe workers and Sanding department of $27,500 (1,375 hours) and $8,250 to factory supervisor. These amounts include wages and benefits.
Dec 17 – Completed all 1,200 bats and applied manufacturing overhead at the predetermined rate to all 1,200 bats in job #950. No overhead has previously been applied to job #950.
Dec 20 – Incurred and paid selling costs of $21,000 and administrative costs of $14,415.
Dec 29 - Sold 350 bats of job #950 for $ 64,250 to Boston Red Sox (on account).
Dec 31 – Big Papi closes out the under/overapplied manufacturing overhead.
Wallace Manufacturing Company Job Cost Sheet Job # Quantity Date Requested Date Completed Item# n/a For n/a Direct Materials Direct Labor Applied Overhead Date Total Cost of completed job Direct Materials Direct Labor Applied Overhead Total Cost Cost/unit #DIV/0 ! Job Cost Sheet Job #950 General Journal Dec 18 Income St. & Balance Sh.Explanation / Answer
1 Predetermined overhead rate as of Jan 1, 2018 Estimated Manufacturing overheads Factory rent $90,000 Factory utilities $38,500 Factory insurance $24,000 Production Supervisor salary $110,000 Depreciation of Factory $75,000 Depreciation of Prod. Equipment $42,500 Glue, pine tar - indirect material $30,000 Total manufacturing overheads $410,000 Expected labour hours 40,000 Overhead rate ($410000/40000) $10.25 2 Journal entries for Dec, 2018 Date Account Debit Credit 3-Dec Raw material $73,000 Accounts payable $73,000 5-Dec Work in process-direct material $18,250 Manufacturing overhead $4,500 Raw material $22,750 Lumber is direct material Glue and pine tar are indirect thus included in manufacturing overhead Cost of Lumber = $73000/1000*250 = $18250 Cost of glue = $10000/20*5= $2500 Cost of pine tar = $5000/5*2 = $2000 10-Dec Manufacturing overhead (rent) $17,500 Manufacturing overhead (utilities) $6,400 . Manufacturing overhead (insurance) $2,100 Cash $26,000 15-Dec Work in Process-Direct Labor $27,500 Manufacturing overhead $8,250 Cash $35,750 17-Dec Work in Process $30,750 Manufacturing Overhead $30,750 Manufacturing overhead = 3000 labor hours x $10.25 per hour = $30750 17-Dec Finished goods inventory $129,000 Work in process $129,000 (direct material+direct labor+applied overhead) 20-Dec Selling expense $21,000 Administrative expenses $14,415 Cash $35,415 29-Dec Accounts receivable $64,250 Sales $64,250 29-Dec Cost of goods sold $37,625 Finished goods inventory $37,625 31-Dec Cost of Goods sold $3,000 Manufacturing overhead $3,000 Income statement for the month ended Dec 31, 2018 Revenue $64,250 Cost of goods sold $37,625 Gross Profit $26,625 Gross Margin 41% Selling Expense $21,000 Administrative expense $14,415 Net income before tax ($8,790) Job cost sheet Job# 950 Quantity 1200 Item# n/a Date requested 25-Nov For n/a Date completed 17-Dec Date Direct Materials Direct Labor Applied Overhead 25-Nov $20,000 $32,500 5-Dec $18,250 $27,500 17-Dec $30,750 Total $38,250 $60,000 $30,750 Cost of completed job Direct Materials $38,250 Direct Labour $60,000 Applied Overhead $30,750 Total Cost $129,000 Cost/unit $107.50 Manufacturing Overhead 30-Nov $1,200,000 30-Nov $1,205,000 5-Dec $4,500 31-Dec $30,750 10-Dec $26,000 15-Dec $8,250 31-Dec $1,238,750 31-Dec $1,235,750 Balance $3,000 Manufacturing overhead are under applied by $3000 Ending Balance of Raw material inventory, WIP inventory, Finished goods inventory Raw Material 30-Nov $22,300 5-Dec $22,750 3-Dec $73,000 31-Dec $95,300 31-Dec $22,750 Final Balance $72,550 850 board feet of ash = $62050 15 barrel of glue = $7500 3 barrels of pine tar = $3000 Work in Process 30-Nov $52,500 31-Dec $129,000 5-Dec $18,250 15-Dec $27,500 17-Dec $30,750 31-Dec $129,000 31-Dec $129,000 Final Balance $0 Finished Goods 30-Nov $8,500 29-Dec $37,625 17-Dec $129,000 31-Dec $137,500 31-Dec $37,625 Final Balance $99,875
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