Professional Documents
Culture Documents
) The following information is available for the first month of operations of Korv
Inc., a manufacturer and craft items:
a.) Cost
b.) Direct materials cost
c.) Direct labor cost
Ex19-7.) The weekly tickets indicate the following distribution of labor hours for three
direct labor employees:
Hours
Job 111 Job 112 Job 113 Process Improvement
Johnny Daniels 18 & nbsp; 10 5 7
Jack Walker 7 &nbs p; 8 23 2
Jim Morgan ; 8 12 16 4
Ex19-8.) Chasse Homes Inc. manufactures mobile homes. Chase uses a job order cost
system. The time tickets from October jobs are summarized below.
Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $20
per direct labor hour. The direct labor rate is $12 per hour.
a.) Journalize the entry to record the factory labor costs.
b.) Journalize the entry to apply overhead to production for October.
Ex19-9.) Staten Island Turbine operates two factories. The company applies factory
overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct
labor hours in factory 2. Estimated factory overhead costs, direct labor hours, and
machine hours are as follows:
Factory 1 Factory 2
Estimated factory overhead cost for fiscal
year beginning May1 &n bsp; $236,800 $118,000
Estimated direct labor hours for year &nb sp; 9,100
Estimated machine hours for year 12,800
Actual factory overhead cost for May & nbsp; $23,200 $11,625
Actual direct labor hours for May 885
Actual Machine Hours for May 1,270
d.) Determine the balances of the factory accounts for each factory as of May 31, and
indicate whether the amounts represent overapplied or underapplied factory overhead.
Ex19-12.) The following account appears in the ledger after only part of the postings
have been completed for January.
Work In Progress
Balance January 1 $15,500
Direct Materials 86,200
Direct labor 64,300
Factory overhead 93,700
Jobs finished during January are summarized as follows:
Job 320 $57,600 Job 327 $26,100
Job 326 75,000 Job 350 94,800
Ex19-14.) The following events took place for Wreckin Ronnie Inc. during July 2008, the
first month of operations as a producer of road bikes:
>Purchased $165,800 of Materials.
>Used $147,600 of direct materials in production.
>Incurred $96,250 of direct labor wages.
>Applied factory overhead at a rate of 80% of direct labor cost.
>Transferred $302,900 of work in process to finished goods.
>Sold goods with a cost of $301,300.
>Sold goods for $520,000.
>Incurred $119,000 of selling expenses.
>incurred $52,100 of administrative expenses.
a.) Prepare the July income statement for Wrekin Ronnie. Assume that Wrekin Ronnie
uses the perpetual inventory method.
b.)Determine the inventory balances at the end of the first month of operations.
Pr19-2a.) Godwin Fixtures Co. uses a job order cost system. The following data
summarize the operations related to production for April 2008, the first mouth of
operations:
a. Materials purchased on account, $137,000.
b.) Materials requisitioned and factory labor used:
Job Materials Factory
No.601 $ 18,100 $17,000
&nbs p; No.602 20,000 25,500
No.603 & nbsp; 13,050 9,700
No.604 34,500 33,550
No.605 &nb sp; 15,700 14,800
No.606 &nbs p; 17,800 18,300
For general factory use 6,600 47,000
Instructions:
1.) Journalize the entries to record the summarized operations.
2.) Post the appropriate entries to t accounts for work in process and finished goods,
using the identifying letters as dates. Insert memorandum account balances as of the end
of the month.
3.) Prepare a schedule of unfinished jobs to support the balance in work in process
account.
4.) Prepare a schedule of completed jobs on hand to support the balance in the finished
goods account.
Ex. 192
a.
Cost of goods sold:
Sales................................................................................................ $775,000
Less gross profit............................................................................ 265,000
Cost of goods sold.......................................................................... $510,000
b.
Direct materials cost:
Materials purchased.....................................................................
$303,000
Less: Indirect materials.............................................................. $ 32,000
Materials inventory........................................................... 35,000
67,000
Direct materials cost.....................................................................
$236,000
c.
Direct labor cost:
Total manufacturing costs for the period....................................
$620,000
Less: Direct materials cost......................................................... $236,000
Factory overhead.............................................................. 112,500*
348,500
Direct labor cost............................................................................
$271,500
*$63,000 + $32,000 + $17,500
Ex. 194
Ex. 197
Supporting Calculations:
Labor Costs (Hourly rate Hours)
Direct
Labor
Hourly (sum of
Indirect
Rate Job 111 Job 112 Job 113 job costs)
Labor
Johnny Daniels $11.40 $205.20 $114.00 $ 57.00 $ 376.20 $
79.80
Jack Walker 13.50 94.50 108.00 310.50 513.00
27.00
Jim Morgan 11.75 94.00 141.00 188.00 423.00
47.00
$1,312.20
$153.80
b. The direct labor costs in the completed jobs would become part of finished
goods inventory. The direct labor costs in Job 113 would remain part of work in
process inventory.
Ex. 198
Ex. 199
b. Factory 2: $13.00 per direct labor hour ($118,300/9,100 direct labor hours)
c. Factory 1:
Work in Process.................................................................. 23,495
Factory Overhead.........................................................
($18.50 1,270)
Factory 2:
Work in Process.................................................................. 11,505
Factory Overhead.........................................................
($13.00 885)
d. Factory 1$295 credit (overapplied) ($23,495 $23,200)
Ex. 1912
Ex. 1914
Prob. 192A
1. a. Materials.............................................................................. 137,000
Accounts Payable..........................................................
137,000
b. Work in Process.................................................................. 238,000
Factory Overhead............................................................... 53,600
Materials........................................................................
125,750
Wages Payable..............................................................
165,850
c. Factory Overhead............................................................... 4,950
Accounts Payable..........................................................
d. Factory Overhead............................................................... 3,700
Accumulated DepreciationMachinery
and Equipment.............................................................
e. Work in Process.................................................................. 71,179
Factory Overhead (1,343 hours $53).......................
f. Finished Goods................................................................... 177,204
Work in Process............................................................
177,204
Computation of cost of jobs finished:
Direct Direct Factory
Job Materials Labor Overhead Total
No. 601 $18,100 $17,000 $11,395 $ 46,495
No. 602 20,000 25,500 12,190 57,690
No. 603 13,050 9,700 9,275 32,025
No. 605 15,700 14,800 10,494 40,994
Total $177,204
2.