Question
Answered step-by-step
ChefSeaLionPerson322
DATA 1 This is the first month of operations. The company designs…
DATA 1
This is the first month of operations. The company designs and manufactures specialty tables. Each table is specially customized for the customer. This month, you have been asked to develop and manufacture two new tables for customers. You will design and build the tables. The company does not have indirect materials. You will be keeping track of the costs incurred to manufacture the tables using Job #1 Cost Sheet and Job #2 Cost Sheet.
The cost of the direct materials that can be used to manufacture the table are as follows.
Table Top $1,900
Table legs, quantity 4 ($600 per leg) $2,400
Drawer $390
Assume a $55 per hour wage rate to the assembly employees.
The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours.
The company estimates that there will be 120 direct labor hours worked during the month.
The fixed estimated manufacturing overhead costs per month are:
Factory supervisor salary $3,000
Rent for the factory $1,500
Depreciation of factory equipment $1,800
Property insurance of factory $1,200
____________________
Total Estimated manufacturing overhead $7,500
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1 What is the predetermined overhead rate (POHR)? ___________
Data 2 The first order you received was to manufacture a table using a table top and four legs. This is your Job #1.
Data 3 The customer that has ordered Job #2, wants a table that is the same as Job #1, but wants to also add a drawer to the table.
Step 1 The following is a list of transactions that need to be recorded for the company for activity in the month of December. Record those in the “General Journal” tab of the excel file using the proper format. Please use the following accounts:
Accounts payable Depreciation expense Salaries and wages expense
Accounts receivables Finished goods Salaries and wages payable
Accumulated depreciation Insurance expense Sales revenue
Advertising expense Manufacturing overhead Work in process
Cost of goods sold Raw materials
1-Dec
Raw materials purchased on account, $19,000.
5-Dec
All Raw materials needed for Job #1 were requested from the material storage for use during the month. All materials are direct. (After you journalize this entry please enter the information into Job #1 Cost Sheet)
10-De
The following employee costs were incurred but not paid during the month:
Direct labor for Job #1, consisted of 60 hours at a rate of $55 per hour, totaling $3,300. (After you journalize this entry please enter the information into Job #1 Cost Sheet)
Salary for supervisor of the factory $2,600.
Administrative Salary $1,800.
12-Dec
Manufacturing overhead cost was applied based on direct labor hours to Job #1 using the POHR calculated in Question 1. (After you journalize this entry please enter the information into Job #1 Cost Sheet)
15-Dec
All Raw materials needed for Job #2 were requested from the material storage for use during the month. All materials are direct. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
16-Dec
Rent for the month of December for the factory building incurred but not paid $1,500.
17-Dec
Advertising costs incurred but not paid for the month was $1,200.
20-Dec
Depreciation for the month of December was recorded on equipment $1,850 ($1,450 for equipment used in the factory and $400 for equipment used in selling and administrative activities).
24-Dec
Property insurance incurred but not paid $1,550 ($1,100 for the factory and $450 for selling and administrative offices).
26-Dec
Job #1 was completed and transferred to Finished Goods during the month.
28-Dec
The completed table was sold on account to the customer for $24,000 during the month. (Hint: Make sure to account for the cost of the table that was sold using the cost from the job cost sheet.)
31-Dec
By the end of the month, 30 hours of direct labor were incurred at a rate of $55 per hour, totaling $1,650 to begin production on job #2. The employees will be paid next month. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
31-Dec
Manufacturing overhead cost was applied using the direct labor hours from Job #2 and the POHR calculated in Question 1. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
Step 2
Post the journal entries that you recorded on the “General Journal” tab to the “T-accounts (General Ledger)” tab and calculate the balance for each account. This is the company’s first month of business, so there will not be any beginning balances.
31-Dec
Record the entry in the general journal to close the Manufacturing Overhead account and adjust for overapplied/underapplied overhead.
Step 3
a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold on the “Schedule of COGM and COGS” tab for Job #1 and Job #2 that were worked on during the month by the company. Make sure to follow the format noted in your book (pg. 109). (Hint: This is the company’s first month of operations and therefore the beginning balances will be zero.)
Step 4 an Income Statement for the month using the Traditional Format on the “Income Statement” tab.
Step 5 Use the following check figures and make any necessary corrections.
Check Figure 1: Cost of Goods Manufactured $11,350
Check Figure 2: Net Operating Income $7,775
Step 6 Answer the following additonal questions. Be sure to all numbers as positive and no answer should be left blank.
2 What is the ending balance for raw materials?
3 What is the ending balance for work in process?
4 What is the ending balance for finished goods?
5 What is the ending balance for accounts payable?
6 From the Schedule of Cost of Goods Manufactured, what are the raw materials used in production?
7 What is the actual manufacturing overhead cost incurred during December?
8 What is the total applied manufacturing overhead cost during December?
9 What is the unadjusted cost of goods sold?
10 Was the manufacturing overhead for month December overapplied/underapplied ? Enter either underapplied or overapplied.
11 What is the dollar amount of overapplied/underapplied manufacturing overhead?
12 What is the adjusted cost of goods sold?
13 What is the gross margin (in dollars) from the income statement?
14 What is the total prime cost from the Job #1 Cost Sheet?
15 What is the total conversion cost from the Job #1 Cost Sheet?
16 What is the total product cost from the Job #1 Cost Sheet?
17 What was the period cost incurred for the month of December?
18 What is the contribution margin (in dollars) for Job #1 (assume that all selling and administrative cost and all manufacturing overhead costs are fixed.)
19 If job#1 was for five tables instead of one, what would be the total amount of variable cost recorded on Job #1’s cost sheet??
20 If the factory has the capacity to produce five tables each month, what would be the total actual fixed manufacturing overhead cost (in dollars) incurred if five tables were produced instead of one?
