1.Analyzing Manufacturing Cost Accounts Fire Rock Company manufactures designer

Question

1.Analyzing Manufacturing Cost Accounts Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for June: Materials June 1 Balance 28,300 June 30 Requisitions (A) June 30 Purchases 113,800 Work in Process June 1 Balance (B) June 30 Completed jobs (F) June 30 Materials (C) June 30 Direct labor (D) June 30 Factory overhead applied (E) Finished Goods June 1 Balance 0 June 30 Cost of goods sold (G) June 30 Completed jobs (F) Wages Payable June 30 Wages incurred 125,000 Factory Overhead June 1 Balance 20,600 June 30 Factory overhead applied (E) June 30 Indirect labor (H) June 30 Indirect materials 15,100 June 30 Other overhead 113,700 In addition, the following information is available: a. Materials and direct labor were applied to six jobs in July: Job No. Style Quantity Direct Materials Direct Labor 201 T100 180 $16,680 $13,000 202 T200 400 31,000 25,000 203 T400 220 12,660 9,000 204 S200 300 32,700 30,000 205 T300 190 19,610 18,000 206 S100 150 8,400 5,000 Total 1,440 $121,050 $100,000 b. Factory overhead is applied to each job at a rate of 170% of direct labor cost. c. The June 1 Work in Process balance consisted of two jobs, as follows: Job No. Style Work in Process, June 1 201 T100 $5,100 202 T200 15,500 Total $20,600 d. Customer jobs completed and units sold in July were as follows: Job No. Style Completed in July Units Sold in July 201 T100 X 144 202 T200 X 320 203 T400 0 204 S200 X 252 205 T300 X 158 206 S100 0 1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers. Job No. Quantity June 1 Work in Process Direct Materials Direct Labor Factory Overhead Total Cost Unit Cost Units Sold Cost of Goods Sold No. 201 $ 5,100 $ 16,680 $ 13,000 $ $ $ $ No. 202 15,500 31,000 25,000 No. 203 12,660 9,000 No. 204 32,700 30,000 No. 205 19,610 18,000 No. 206 8,400 5,000 Total $20,600 121,050 100,000 $ $ $ a. Materials Requisitions $ b. Work in Process Beginning Balance $ c. Direct Materials $ d. Direct Labor $ e. Factory overhead applied $ f. Completed jobs $ g. Cost of goods sold $ h. Indirect labor $ 2. Determine the June 30 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances. Materials: $ Work in Process: $ Finished Goods: $ Factory Overhead: $ 2. 3. 4. Next

Explanation / Answer

1 A=material requisitioned=Total material applied+Indirect material=121050+15100=$ 136150 B=20600 C=121050 (Total of materials applied) D=100000 (Total of labor applied) E=Factory overhead applied=170% of direct labor cost Factory overhead applied=100000*170%=$ 170000 F=Cost of completed jobs All jobs are completed.Hence cost of jobs completed=total cost in work in process=B+C+D+E=20600+121050+100000+170000=$ 411650 G=Cost of goods sold Find indivudual cost of jobs.Then compute cost per unit.Then cost of goods sold=Units sold*Cost per unit Job 201 Beginning balance 5100 Material 16680 Labor 13000 Factory overhead (13000*170%) 22100 Total 56880 Quantity 180 Cost per unit 316 Units sold=144 cost of goods sold=144*316=$ 45504 Job 202 Beginning balance 15500 Material 31000 Labor 25000 Factory overhead (25000*170%) 42500 Total 114000 Quantity 400 Cost per unit 285 Units sold=320 cost of goods sold=320*285=$ 91200 Job 203 Beginning balance 0 Material 12660 Labor 9000 Factory overhead (9000*170%) 15300 Total 36960 Quantity 220 Cost per unit 168 Units sold=0 cost of goods sold=0*168=0 Job 204 Beginning balance 0 Material 32700 Labor 30000 Factory overhead (9000*170%) 51000 Total 113700 Quantity 300 Cost per unit 379 Units sold=252 cost of goods sold=252*379=$ 95508 Job 205 Beginning balance 0 Material 19610 Labor 18000 Factory overhead (18000*170%) 30600 Total 68210 Quantity 190 Cost per unit 359 Units sold=158 cost of goods sold=158*359=$ 56722 Job 206 Beginning balance 0 Material 8400 Labor 5000 Factory overhead (5000*170%) 8500 Total 21900 Quantity 150 Cost per unit 146 Units sold=0 cost of goods sold=0*146=0 G=cost of goods sold=45504+91200+95508+56722=$ 288934 H=Indirect labor=Wages incurred-Total labor applied=125000-100000=25000 2 Materials June 1 Balance 28300 June 30 Requisitions (A) 121050 June 30 Purchases 113800 June 30 balance 21050 (Balancing figure) Total 142100 Total 142100 Work in Process June 1 Balance (B) 20600 June 30 Completed jobs (F) 411650 June 30 Materials (C) 121050 June 30 Balance 0 June 30 Direct labor (D) 100000 (Balancing figure) June 30 Factory overhead applied (E) 170000 411650 411650 Finished Goods June 1 Balance 0 June 30 Cost of goods sold (G) 288934 June 30 Completed jobs (F) 411650 June 30 Balance (Balancing figure) 122716 411650 411650 Factory Overhead June 1 Balance 20600 June 30 Factory overhead applied € 170000 June 30 Indirect labor (H) 25000 June 30 Balance June 30 Indirect materials 15100 (Balancing figure) 4400 June 30 Other overhead 113700 174400 174400

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