Home / Questions / Southworth Company uses job-order costing system and applies manufacturing overhead cost ...
|
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 |
Jun 22 2020 View more View Less
is 2 right? I really only need question 3 answered unless 2 is wrong, thank you:)From Chapter 12: Part 5. Stock market transactions.(A) Tom and Mary have each decided to ...
Dec 04 2019ABC is a triangle. Angle A is 62°, correct to the nearest degree. Angle B is 53.4°, correct to the nearest tenth of a degree?
Apr 23 2020The density of a crystal of polyethylene (PE) is 1.014 (all densities are in Mg m–3 at 20 °C). The density of amorphous PE is 0.84. Estimate the percentage crystallinity ...
Jun 26 2020Homework 5 Question Joe has utility function U Inx, + Inx; and budget constraint Pix + Pyyy. Set up the lagrangian for the utility maximization problem and take the appro...
Jan 07 2020In C6.18 LAB: Miles to track laps One lap around a standard high-school running track is exactly 0.25 miles. Write a program that takes a number of miles as input, and ou...
Apr 06 2020The fracture strength of glass may be increased by etching away a thin surface e layer. It is believed that the etching may alter the surface crack geometry (i.e.reduce c...
May 14 2020What should I do first, if I want to be trusted by others?a.I should be worthlessb.I should be worklessc.I should be trustlessd.I should be trustworthyWhich of the follow...
Apr 09 2021Financial plans draw out the connections between: A. the firm's plans for growth and the financing requirements. B. profit margins and sales growth. C. accounting...
Jan 09 2020A plant can manufacture golf clubs per day at a total daily cost of golf clubs per day for a total cost of Please show all work and calculations ssuming that daily co...
Feb 06 2020Assume that the new trade terms of 2/10, net 30 will increase sales by 15 percent because the discount makes Dome’s price competitive. If Dome earns 20 percent on sales ...
Apr 23 2020