Managerial accounting 1b – ch15

2.

Only one job remained in the goods in process inventory at December 31, 2011. Its direct materials cost is $30,000. How much direct labor cost and overhead cost are assigned to it? (Omit the “$” sign in your response.)

The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system.

April 30

May 31

Inventories

Raw materials

$

40,000

$

50,000

Goods in process

9,600

19,500

Finished goods

60,000

33,200

Activities and information for May

Raw materials purchases (paid with cash)

189,000

Factory payroll (paid with cash)

400,000

Factory overhead

Indirect materials

12,000

Indirect labor

75,000

Other overhead costs

100,500

Sales (received in cash)

1,200,000

Predetermined overhead rate based on direct labor cost

65

%

The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system.

April 30

May 31

Inventories

Raw materials

$

40,000

$

50,000

Goods in process

9,600

19,500

Finished goods

60,000

33,200

Activities and information for May

Raw materials purchases (paid with cash)

189,000

Factory payroll (paid with cash)

400,000

Factory overhead

Indirect materials

12,000

Indirect labor

75,000

Other overhead costs

100,500

Sales (received in cash)

1,200,000

Predetermined overhead rate based on direct labor cost

65

%

1.

Raw materials purchases for cash.

2.

Direct materials usage.

3.

Indirect materials usage.

Prepare journal entries for the above events for the month of May. (Omit the “$” sign in your response.)

The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system.

April 30

May 31

Inventories

Raw materials

$

40,000

$

50,000

Goods in process

9,600

19,500

Finished goods

60,000

33,200

Activities and information for May

Raw materials purchases (paid with cash)

189,000

Factory payroll (paid with cash)

400,000

Factory overhead

Indirect materials

12,000

Indirect labor

75,000

Other overhead costs

100,500

Sales (received in cash)

1,200,000

Predetermined overhead rate based on direct labor cost

65

%

1.

Factory payroll costs in cash.

2.

Direct labor usage.

3.

Indirect labor usage.

The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system.

April 30

May 31

Inventories

Raw materials

$

40,000

$

50,000

Goods in process

9,600

19,500

Finished goods

60,000

33,200

Activities and information for May

Raw materials purchases (paid with cash)

189,000

Factory payroll (paid with cash)

400,000

Factory overhead

Indirect materials

12,000

Indirect labor

75,000

Other overhead costs

100,500

Sales (received in cash)

1,200,000

Predetermined overhead rate based on direct labor cost

65

%

1.

Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts).

2.

Application of overhead to goods in process.

Prepare journal entries for the above events for the month of May. (Omit the “$” sign in your response.)

The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system.

April 30

May 31

Inventories

Raw materials

$

40,000

$

50,000

Goods in process

9,600

19,500

Finished goods

60,000

33,200

Activities and information for May

Raw materials purchases (paid with cash)

189,000

Factory payroll (paid with cash)

400,000

Factory overhead

Indirect materials

12,000

Indirect labor

75,000

Other overhead costs

100,500

Sales (received in cash)

1,200,000

Predetermined overhead rate based on direct labor cost

65

%

Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.(Omit the “$” sign in your response.)

Winfrey Co.’s March 31 inventory of raw materials is $150,000. Raw materials purchases in April are $400,000, and factory payroll cost in April is $220,000. Overhead costs incurred in April are: indirect materials, $30,000; indirect labor, $14,000; factory rent, $20,000; factory utilities, $12,000; and factory equipment depreciation, $30,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $380,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306

Job 307

Job 308

Balances on March 31

Direct materials

$

14,000

$

18,000

Direct labor

18,000

16,000

Applied overhead

9,000

8,000

Costs during April

Direct materials

100,000

170,000

$

80,000

Direct labor

30,000

56,000

120,000

Applied overhead

?

?

?

Status on April 30

Finished (sold)

Finished (unsold)

In process

Required:

1.

Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31). (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response. )

a.

Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.)

b.

Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory.

c.

Transfer of Jobs 306 and 307 to the Finished Goods Inventory.

d.

Cost of goods sold for Job 306.

e.

Revenue from the sale of Job 306.

f.

Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

2.

Prepare journal entries for the month of April to record the above transactions. (Omit the “$” sign in your response.)

3.

Prepare a manufacturing statement for April (use a single line presentation for direct materials and show the details of overhead cost.) (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

4.1

Compute gross profit for April. (Omit the “$” sign in your response.)

4.2

Show how to present the inventories on the April 30 balance sheet. (Omit the “$” sign in your response.)