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Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $248,000 of manufacturing overhead for an estimated allocation base of $155,000 direct material dollars. |
The following transactions took place during the year (all purchases and services were acquired on account): |
a. | Raw materials purchased, $142,000. |
b. | Raw materials requisitioned for use in production (all direct materials), $150,000. |
c. | Utility bills incurred in the factory, $21,000. |
d. | Costs for salaries and wages were incurred as follows: |
Direct labor | $ | 216,000 |
Indirect labor | $ | 90,000 |
Selling and administrative salaries | $ | 145,000 |
e. | Maintenance costs incurred in the factory, $15,000. |
f. | Advertising costs incurred, $130,000. |
g. |
Depreciation recorded for the year, $50,000 (90% relates to factory assets, and the remainder relates to selling and administrative assets). |
h. |
Rental cost incurred on buildings, $90,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration). |
i. | Miscellaneous selling and administrative costs incurred, $17,000. |
j. | Manufacturing overhead cost was applied to jobs, $ ? . |
k. |
Cost of goods manufactured for the year, $590,000. |
l. |
Sales for the year (all on account) totaled $1,000,000. These goods cost $600,000 according to their job cost sheets. |
The balances in the inventory accounts at the beginning of the year were as follows: |
Raw materials | $ | 18,000 |
Work in process | $ | 24,000 |
Finished Goods | $ | 35,000 |
Required: |
1. | Prepare journal entries to record the above data. |
General Journal | Debit | Credit | |
a. | (Click to select)Accounts payableRaw materialsAdvertising expenseMiscellaneous expenseSalaries and wages payableSelling and administrative salariesWork in processManufacturing overhead | ||
(Click to select)Miscellaneous expenseWork in processSelling and administrative salariesAccounts payableAdvertising expenseManufacturing overheadRaw materialsSalaries and wages payable | |||
b. | (Click to select)Selling and administrative salariesAdvertising expenseAccounts payableSalaries and wages payableRaw materialsManufacturing overheadWork in processMiscellaneous expense | ||
(Click to select)Manufacturing overheadWork in processSalaries and wages payableRaw materialsMiscellaneous expenseSelling and administrative salariesAdvertising expenseAccounts payable | |||
c. | (Click to select)Accounts payableManufacturing overheadRaw materialsMiscellaneous expenseAdvertising expenseSelling and administrative salariesWork in processSalaries and wages payable | ||
(Click to select)Service expensesWork in processMiscellaneous expenseSalaries and wages payableManufacturing overheadRaw materialsAdvertising expenseAccounts payable | |||
d. | (Click to select)Manufacturing overheadSalaries and wages payableAccounts payableSelling and administrative salariesAdvertising expenseWork in processMiscellaneous expenseRent expense | ||
(Click to select)Salaries and wages payableMiscellaneous expenseAccounts payableSelling and administrative salariesAdvertising expenseWork in processRent expenseManufacturing overhead | |||
(Click to select)Work in processMiscellaneous expenseAccounts payableSalaries and wages payableAdvertising expenseRent expenseManufacturing overheadSelling and administrative salaries | |||
(Click to select)Miscellaneous expenseManufacturing overheadWork in processRent expenseAdvertising expenseSalaries and wages payableSelling and administrative salariesAccounts payable | |||
e. | (Click to select)Accumulated depreciationSelling and administrative salariesDepreciation expenseAccounts payableAdvertising expenseMiscellaneous expenseManufacturing overheadSalaries and wages payable | ||
(Click to select)Accumulated depreciationAdvertising expenseManufacturing overheadAccounts payableDepreciation expenseMiscellaneous expenseSelling and administrative salariesSalaries and wages payable | |||
f. | (Click to select)Depreciation expenseSelling and administrative salariesSalaries and wages payableAccounts payableMiscellaneous expenseAdvertising expenseAccumulated depreciationManufacturing overhead | ||
(Click to select)Advertising expenseDepreciation expenseMiscellaneous expenseAccumulated depreciationSalaries and wages payableSelling and administrative salariesManufacturing overheadAccounts payable | |||
g. | (Click to select)Miscellaneous expenseAccumulated depreciationAccounts payableSelling and administrative salariesManufacturing overheadDepreciation expenseAdvertising expenseRent expense | ||
(Click to select)Advertising expenseSelling and administrative salariesRent expenseMiscellaneous expenseManufacturing overheadDepreciation expenseAccumulated depreciationAccounts payable | |||
(Click to select)Manufacturing overheadRent expenseMiscellaneous expenseAccounts payableAdvertising expenseAccumulated depreciationDepreciation expenseSelling and administrative salaries | |||
h. | (Click to select)Advertising expenseAccumulated depreciationManufacturing overheadDepreciation expenseSelling and administrative salariesAccounts payableMiscellaneous expenseRent expense | ||
(Click to select)Advertising expenseAccumulated depreciationRent expenseManufacturing overheadMiscellaneous expenseAccounts payableDepreciation expenseSelling and administrative salaries | |||
(Click to select)Rent expenseDepreciation expenseAccumulated depreciationMiscellaneous expenseSelling and administrative salariesAdvertising expenseAccounts payableManufacturing overhead | |||
i. | (Click to select)Accounts payableAdvertising expenseManufacturing overheadWork in processSelling and administrative salariesMiscellaneous expenseRent expenseSalaries and wages payable | ||
(Click to select)Advertising expenseWork in processAccounts payableSelling and administrative salariesSalaries and wages payableMiscellaneous expenseRent expenseManufacturing overhead | |||
j. | (Click to select)Rent expenseSalaries and wages payableManufacturing overheadFinished goodsAdvertising expenseSelling and administrative salariesMiscellaneous expenseWork in process | ||
(Click to select)Salaries and wages payableAdvertising expenseMiscellaneous expenseSelling and administrative salariesAccounts payableWork in processRent expenseManufacturing overhead | |||
k. | (Click to select)Accounts payableRaw materialsWork in processSalesCost of goods soldAccounts receivableSelling and administrative salariesFinished goods | ||
(Click to select)Raw materialsCost of goods soldSelling and administrative salariesAccounts payableFinished goodsAccounts receivableWork in processSales | |||
l | (Click to select)Raw materialsSelling and administrative salariesFinished goodsAccounts receivableSalesSalaries and wages payableAccounts payableWork in process | ||
(Click to select)Salaries and wages payableAccounts receivableRaw materialsSelling and administrative salariesSalesAccounts payableCost of goods soldWork in process | |||
(Click to select)Finished goodsRaw materialsSalaries and wages payableSelling and administrative salariesAccounts payableSalesCost of goods soldMiscellaneous expense | |||
(Click to select)Raw materialsFinished goodsSelling and administrative salariesAccounts payableAccounts receivableSalaries and wages payableMiscellaneous expenseCost of goods sold | |||
2. |
Post your entries to T-accounts. (DonAc€?ct forget to enter the opening inventory balances above.) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account.(Record the transactions in the given order.) |
Accounts Receivable |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Raw Materials |
Bal. | (Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | |||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
Bal. | ||||
Work in Process |
Bal. | (Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | |||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
Bal. | ||||
Finished Goods |
Bal. | (Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | |||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
Bal. | ||||
Manufacturing Overhead |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | (Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | |||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
Bal. | ||||
Accounts Payable |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(j)(i)(k)(l) | ||||
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) | ||||
Bal. | ||||
Accumulated Depreciation |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Depreciation Expense |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Salaries & Wages Payable |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Selling and Administrative Salaries |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Miscellaneous Expense |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Advertising Expense |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Rent Expense |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Cost of Goods Sold |
(Click to select)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l) |
Sales |
(Click to select)(a)(b)(c)(d)(e)(f)(i)(g)(h)(j)(k)(l) | ||||
3. |
Prepare a schedule of cost of goods manufactured. (Input all amounts as positive values.) |
Southworth Company Schedule of Cost of Goods Manufactured |
||
Direct materials: | ||
(Click to select)Work in process, endingFinished goods inventory, beginningRaw materials inventory, endingRaw materials inventory, beginningWork in process, beginning | $ | |
(Click to select)AddDeduct: (Click to select)Work in process, beginningPurchases of raw materialsFinished goods inventory, beginningWork in process, endingRaw materials inventory, ending | ||
(Click to select)Raw materials inventory, endingWork in process, endingRaw materials inventory, beginningMaterials available for useWork in process, beginning | ||
(Click to select)AddDeduct: (Click to select)Work in process, beginningWork in process, endingRaw materials inventory, beginningPurchases of raw materialsRaw materials inventory, ending | ||
Materials used in production | $ | |
(Click to select)Direct laborRaw materials inventory, beginningPurchases of raw materialsWork in process, endingRaw materials inventory, ending | ||
(Click to select)Manufacturing overhead applied to work in processRaw materials inventory, beginningPurchases of raw materialsDirect laborRaw materials inventory, ending | ||
Total manufacturing cost | ||
(Click to select)DeductAdd: (Click to select)Work in process, beginningWork in process, endingRaw materials inventory, beginningPurchases of raw materialsRaw materials inventory, ending | ||
(Click to select)AddDeduct: (Click to select)Purchases of raw materialsWork in process, endingWork in process, beginningRaw materials inventory, beginningRaw materials inventory, ending | ||
Cost of goods manufactured | $ | |
4. |
Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold. (Input all amounts as positive values.) |
General Journal | Debit | Credit |
(Click to select)Accounts receivableSelling and administrative salariesCost of goods soldManufacturing overheadAccounts payableWork in processSalaries and wages payableFinished goods | ||
(Click to select)Salaries and wages payableCost of goods soldWork in processManufacturing overheadFinished goodsSelling and administrative salariesAccounts payableAccounts receivable | ||
Schedule of cost of goods sold: | |
(Click to select)Cost of goods available for saleFinished goods inventory, endingUnadjusted cost of goods soldUnderapplied overheadFinished goods inventory, beginning | $ |
(Click to select)DeductAdd: (Click to select)Cost of goods manufacturedCost of goods available for saleOverapplied overheadUnderapplied overheadUnadjusted cost of goods sold | |
(Click to select)Finished goods inventory, endingCost of goods available for saleUnadjusted cost of goods soldFinished goods inventory, beginningCost of goods manufactured | |
(Click to select)DeductAdd: (Click to select)Overapplied overheadUnderapplied overheadCost of goods available for saleUnadjusted cost of goods soldFinished goods inventory, ending | |
(Click to select)Cost of goods manufacturedUnderapplied overheadFinished goods inventory, endingFinished goods inventory, beginningUnadjusted cost of goods sold | |
(Click to select)DeductAdd: (Click to select)Cost of goods available for saleUnderapplied overheadOverapplied overheadFinished goods inventory, endingUnadjusted cost of goods sold | |
Adjusted cost of goods sold | $ |
5. |
Prepare an income statement for the year. (Input all amounts as positive values.) |
Southworth Company Income Statement |
||
(Click to select)Cost of goods soldAdvertising expenseRent expenseSalesSelling and administrative salariesDepreciation expenseMiscellaneous expense | $ | |
(Click to select)Cost of goods soldSelling and administrative salariesRent expenseAdvertising expenseDepreciation expenseSalesMiscellaneous expense | ||
(Click to select)Gross lossGross margin | ||
Selling and administrative expenses: | ||
(Click to select)Depreciation expenseSelling and administrative salariesAdvertising expenseInsurance expenseMiscellaneous expenseRent expenseUtilities expense | $ | |
(Click to select)Rent expenseMiscellaneous expenseInsurance expenseSelling and administrative salariesAdvertising expenseUtilities expenseDepreciation expense | ||
(Click to select)Utilities expenseMiscellaneous expenseAdvertising expenseSelling and administrative salariesDepreciation expenseInsurance expenseRent expense | ||
(Click to select)Insurance expenseMiscellaneous expenseRent expenseDepreciation expenseSelling and administrative salariesAdvertising expenseUtilities expense | ||
(Click to select)Selling and administrative salariesRent expenseMiscellaneous expenseInsurance expenseAdvertising expenseDepreciation expenseUtilities expense | ||
(Click to select)Net operating incomeNet operating loss | $ | |
6. |
Job 218 was one of the many jobs started and completed during the year. The job required $3,600 in direct materials and 400 hours of direct labor time at a rate of $11 per hour. If the job contained 500 units and the company billed at 75% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer? (Round your answer to 2 decimal places.) |
Price charged for Job 218 | $ | per unit |
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