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Southworth Company uses 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

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

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