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Assignment Print View

1.

award:

10.00points

Exercise22ApplyOverhead[LO2] Westan Corporation uses a predetermined overhead rate of $22.30 per direct laborhour. This predeterminedratewasbasedonacostformulathatestimated$267,600oftotalmanufacturingoverhead foranestimatedactivitylevelof12,000directlaborhours. The company incurred actual total manufacturing overhead costs of $267,000 and 12,100 total direct laborhoursduringtheperiod.

Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

Manufacturingoverheadapplied
ViewHint#1

Worksheet Exercise22ApplyOverhead[LO2]

Difficulty:Medium LearningObjective:0202Apply overheadcosttojobsusinga predeterminedoverheadrate.

2.

award:

10.00points

Exercise24PrepareJournalEntries[LO4] KirkaidCompanyrecordedthefollowingtransactionsforthejustcompletedmonth.
a. $82,000inrawmaterialswerepurchasedonaccount. b. $80,000inrawmaterialswererequisitionedforuseinproduction.Ofthisamount,$66,000wasfordirect materialsandtheremainderwasforindirectmaterials. c. Total labor wages of $111,500 were incurred. Of this amount, $100,700 was for direct labor and the remainderwasforindirectlabor. d. Additionalmanufacturingoverheadcostsof$194,000wereincurred. Required: Recordtheabovetransactionsinjournalentries. a. (Clicktoselect) (Clicktoselect) b. (Clicktoselect) (Clicktoselect) (Clicktoselect) c. (Clicktoselect) GeneralJournal Debit Credit

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Assignment Print View

(Clicktoselect) (Clicktoselect) (Clicktoselect)

ViewHint#1

d. (Clicktoselect)

Worksheet

Difficulty:Hard

Exercise24PrepareJournal Entries[LO4]

LearningObjective:0204 Understandtheflowofcostsinajob ordercostingsystemandprepare appropriatejournalentriestorecord costs.

3.

award:

10.00points

Exercise25PrepareTAccounts[LO5,LO7] GrangerProductsrecordedthefollowingtransactionsforthejustcompletedmonth.Thecompanyhadno beginninginventories.

a. $75,200inrawmaterialswerepurchasedforcash. b. $71,900inrawmaterialswererequisitionedforuseinproduction.Ofthisamount,$66,800wasfordirect materialsandtheremainderwasforindirectmaterials. c. Totallaborwagesof$150,000wereincurredandpaid.Ofthisamount,$134,400wasfordirectlaborand theremainderwasforindirectlabor. d. Additionalmanufacturingoverheadcostsof$125,600wereincurredandpaid. e. Manufacturing overhead costs of $167,900 were applied to jobs using the companys predetermined overheadrate. f. Allofthejobsinprogressattheendofthemonthwerecompletedandshippedtocustomers. g. AnyunderappliedoroverappliedoverheadfortheperiodwasclosedouttoCostofGoodsSold.

Required: 1. Post the above transactions to Taccounts. (Record the transactions in the given order. Leave no cellsblankbecertaintoenter"0"whereverrequired.)

Cash

(Clicktoselect) (Clicktoselect) (Clicktoselect) RawMaterials

(Clicktoselect) Balance

(Clicktoselect) WorkinProcess

(Clicktoselect) (Clicktoselect) (Clicktoselect)

(Clicktoselect)

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Balance

Assignment Print View

FinishedGoods

(Clicktoselect) Balance

(Clicktoselect) ManufacturingOverhead

(Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) Balance

(Clicktoselect) CostofGoodsSold

(Clicktoselect) Balance

(Clicktoselect)

2. Determinethecostofgoodssoldfortheperiod.

Costofgoodssold
ViewHint#1

Worksheet

Difficulty:Hard

LearningObjective:0207Compute underappliedoroverapplied overheadcostandpreparethe journalentrytoclosethebalancein ManufacturingOverheadtothe appropriateaccounts.

Exercise25PrepareTAccounts [LO5,LO7]

LearningObjective:0205UseT accountstoshowtheflowofcostsin ajobordercostingsystem.

4.

award:

10.00points

Exercise211JournalEntriesandTaccounts[LO2,LO4,LO5] Foley Company uses a joborder costing system. The following data relate to the month of October, the firstmonthofthecompanysfiscalyear:
a. Rawmaterialspurchasedonaccount,$210,000. b. Rawmaterialsissuedtoproduction,$189,000(80%directand20%indirect). c. Directlaborcostincurred,$49,000andindirectlaborcostincurred,$21,000. d. Depreciationrecordedonfactoryequipment,$105,000. e. OthermanufacturingoverheadcostsincurredduringOctober,$130,000(creditaccountspayable). f. Thecompanyappliesmanufacturingoverheadcosttoproductiononthebasisof$4permachinehour.A totalof76,200machinehourswererecordedforOctober.

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g. Production orders costing $510,000 according to their job cost sheets were completed during October andtransferredtoFinishedGoods. h. Productionordersthathadcost$451,000tocompleteaccordingtotheirjobcostsheetswereshippedto customersduringthemonth.Thesegoodsweresoldonaccountat50%abovecost. Required: 1. Preparejournalentriestorecordtheinformationgivenabove. a. (Clicktoselect) (Clicktoselect) b. (Clicktoselect) (Clicktoselect) (Clicktoselect) c. (Clicktoselect) (Clicktoselect) (Clicktoselect) d. (Clicktoselect) (Clicktoselect) e. (Clicktoselect) (Clicktoselect) f. (Clicktoselect) (Clicktoselect) g. (Clicktoselect) (Clicktoselect) h. (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) GeneralJournal Debit Credit

2. Prepare Taccounts for Manufacturing Overhead and Work in Process. Post the relevant information abovetoeachaccount.Computetheendingbalanceineachaccount,assumingthatWorkinProcess hasabeginningbalanceof$34,000.(Recordthetransactionsinthegivenorder.) ManufacturingOverhead (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) End.Bal

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Assignment Print View

WorkinProcess

Beg.Bal (Clicktoselect) (Clicktoselect) (Clicktoselect) End.Bal

(Clicktoselect)

LearningObjective:0204 Understandtheflowofcostsinajob ordercostingsystemandprepare appropriatejournalentriestorecord costs. LearningObjective:0205UseT accountstoshowtheflowofcostsin ajobordercostingsystem.

Worksheet

Difficulty:Hard

LearningObjective:0202Apply Exercise211JournalEntriesandT overheadcosttojobsusinga accounts[LO2,LO4,LO5] predeterminedoverheadrate.

5.

award:

10.00points

Problem221APredeterminedOverheadRateDispositionofUnderappliedorOverappliedOverhead [LO1,LO7] Savallas Company is highly automated and uses computers to control manufacturing operations. The company uses a joborder costing system and applies manufacturing overhead cost to products on the basisofcomputerhours.Thefollowingestimateswereusedinpreparingthepredeterminedoverheadrate atthebeginningoftheyear:
Computerhours Fixedmanufacturingoverheadcost Variablemanufacturingoverheadpercomputerhour 88,000 $ 1,273,000 $ 4.00

During the year, a severe economic recession resulted in cutting back production and a buildup of inventoryinthecompanyswarehouse.Thecompanyscostrecordsrevealedthefollowingactualcostand operatingdatafortheyear: Computerhours Manufacturingoverheadcost Inventoriesatyearend: Rawmaterials Workinprocess Finishedgoods Costofgoodssold 40,000 $ 791,000 $ 430,000 $ 190,000 $ 1,050,000 $ 2,770,000

Required: 1. Computethecompanyspredeterminedoverheadratefortheyear. (Roundyouranswerto2decimal places.) Predeterminedoverheadrate $ perhour

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Assignment Print View

2. Compute the underapplied or overapplied overhead for the year. (Round your intermediate calculationsto2decimalplacesandfinalanswertothenearestdollaramount.Inputtheamount asapositivevalue.) (Clicktoselect) overheadcost $

3.1 Assume the company closes any underapplied or overapplied overhead directly to Cost of Goods Sold. Prepare the appropriate journal entry. (Round your intermediate calculations to 2 decimal placesandfinalanswerstothenearestdollaramount.) GeneralJournal (Clicktoselect) (Clicktoselect) 3.2 Willthisentryincreaseordecreasenetoperatingincome? Thisentrywilldecreasenetoperatingincome. Thisentrywillincreasenetoperatingincome.
LearningObjective:0207Compute underappliedoroverapplied overheadcostandpreparethe journalentrytoclosethebalancein ManufacturingOverheadtothe appropriateaccounts.

Debit

Credit

Worksheet

Difficulty:Hard

Problem221APredetermined OverheadRateDispositionof UnderappliedorOverapplied Overhead[LO1,LO7]

LearningObjective:0201Compute apredeterminedoverheadrate.

6.

award:

10.00points

Problem227AComprehensiveProblem[LO1,LO2,LO4,LO5,LO6,LO7] Sovereign Millwork, Ltd., produces reproductions of antique residential moldings at a plant located in Manchester,England.Becausetherearehundredsofproducts,someofwhicharemadeonlytoorder,the company uses a joborder costing system. On July 1, the start of the companys fiscal year, inventory accountbalanceswereasfollows:
Rawmaterials Workinprocess Finishedgoods 10,800 4,100 8,800

The company applies overhead cost to jobs on the basis of machinehours. Its predetermined overhead rate for the fiscal year starting July 1 was based on a cost formula that estimated 96,000 of manufacturing overhead for an estimated activity level of 40,000 machinehours. During the year, the followingtransactionswerecompleted: a. Rawmaterialspurchasedonaccount,166,000. b. Raw materials requisitioned for use in production, 149,000 (materials costing 126,000 were chargeabledirectlytojobstheremainingmaterialswereindirect). c. Costsforemployeeserviceswereincurredasfollows:

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Directlabor Indirectlabor Salescommissions Administrativesalaries

94,000 44,200 26,000 50,000

d.Prepaidinsuranceexpiredduringtheyear,18,500(13,600ofthisamountrelatedtofactoryoperations, andtheremainderrelatedtosellingandadministrativeactivities). e.Utilitycostsincurredinthefactory,10,000. f. Advertisingcostsincurred,13,000. g.Depreciationrecordedonequipment,23,000.(17,000ofthisamountwasonequipmentusedinfactory operationstheremaining6,000wasonequipmentusedinsellingandadministrativeactivities.) h.Manufacturing overhead cost was applied to jobs, ? (The company recorded 39,000 machinehours of operatingtimeduringtheyear.) i. Goodsthathadcost289,000tomanufactureaccordingtotheirjobcostsheetswerecompleted. j. Sales(allonaccount)tocustomersduringtheyeartotaled503,000.Thesegoodshadcost289,000to manufactureaccordingtotheirjobcostsheets. Required: 1. Prepare journal entries to record the transactions for the year. (Round your intermediate calculationsto2decimalplaces.) a. (Clicktoselect) (Clicktoselect) b. (Clicktoselect) (Clicktoselect) (Clicktoselect) c. (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) GeneralJournal Debit Credit

(Clicktoselect) d. (Clicktoselect) (Clicktoselect) (Clicktoselect) e. (Clicktoselect) (Clicktoselect) f. (Clicktoselect) (Clicktoselect) g. (Clicktoselect) (Clicktoselect) h. (Clicktoselect) (Clicktoselect)

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(Clicktoselect) i. (Clicktoselect) j. (Clicktoselect) 2. (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect)

PrepareTaccountsforinventories,ManufacturingOverhead,andCostofGoodsSold.Postrelevant datafromyourjournalentriestotheseTaccounts(dontforgettoentertheopeningbalancesinyour inventory accounts). Compute an ending balance in each account. (Record the transactions in the givenorder.Roundyourintermediatecalculationsto2decimalplaces.) RawMaterials Bal. (Clicktoselect) Bal. (Clicktoselect) WorkinProcess Bal. (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) Bal. FinishedGoods Bal. (Clicktoselect) Bal. (Clicktoselect) ManufacturingOverhead (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) Bal. (Clicktoselect)

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Assignment Print View

CostofGoodsSold (Clicktoselect)

3a. IsManufacturingOverheadunderappliedoroverappliedfortheyear? Overapplied Underapplied 3b. PrepareajournalentrytocloseanybalanceintheManufacturingOverheadaccounttoCostofGoods Sold.(Roundyourintermediatecalculationsto2decimalplaces.) GeneralJournal (Clicktoselect) (Clicktoselect) 4. Debit Credit

Prepare an income statement for the year. (Input all amounts as positive values. Round your intermediatecalculationsto2decimalplaces.) SovereignMillwork,Ltd IncomeStatement FortheYearEndedJune30 (Clicktoselect) (Clicktoselect) (Clicktoselect) Sellingandadministrativeexpenses: (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect) (Clicktoselect)
LearningObjective:0205UseT accountstoshowtheflowofcostsin ajobordercostingsystem. LearningObjective:0206Prepare schedulesofcostofgoods manufacturedandcostofgoodssold andanincomestatement. LearningObjective:0207Compute underappliedoroverapplied overheadcostandpreparethe journalentrytoclosethebalancein ManufacturingOverheadtothe appropriateaccounts.

Worksheet

LearningObjective:0201Compute apredeterminedoverheadrate. LearningObjective:0202Apply overheadcosttojobsusinga predeterminedoverheadrate. LearningObjective:0204 Understandtheflowofcostsinajob ordercostingsystemandprepare appropriatejournalentriestorecord costs.

Problem227AComprehensive Problem[LO1,LO2,LO4,LO5,LO6, LO7]

Difficulty:Hard

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