PART 1 G-Force Woodcraft manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labour intensive production process, so it assigns manufacturing overhead based on direct labour cost. G-Force expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2016. At the end of December 2018, G-Force reported work in process inventory (Job 551) of $93,000 The following events occurred during January 2019.i) Purchased materials on account, $392,000ii) Incurred manufacturing wages of $400,000iii) Requisitioned direct materials and used direct labour in manufacturing                            Direct Materials           Direct LabourJob 551                $70,200                        $61,200Job 552                $97,500                        $115,600Job 553                $105,300                      $78,200Job 554                $117,000                      $85,000iv) Issued indirect materials to production, $30,000 v) Charged indirect manufacturing wages to production, $60,000 vi) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $134,000 vii) Allocated overheads to jobs at the predetermined rate viii)Units completed: 551, 552 & 554 ix) Sold units 551 & 554 (billed customers at a margin of 33⅓% on sales) Required:(a) Compute G-Force’s predetermined manufacturing overhead rate for 2019. (b) Calculate the total manufacturing costs for each job.  (c) Using the total figures, record the above transactions in the general journal.  (d) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly showing the balance before closing the account. State the journal entries necessary to dispose of the variance. Assume that the manufacturing overhead variance is immaterial.  (e) What is the balance in the Cost of Goods Sold account after the adjustment?  (f) Compute G-Forcer’s gross profit earned on the jobs, after adjusting for the manufacturing overhead variance  (g) Post the appropriate entries to Work in Process Inventory account & determine the account balance on January 31. PART 2Wilkin Products Ltd. makes a single product using two processes. Quality control check takes place during the process, at which point, rejected units are separated from good units. The following details relate to production for the month of April 20X7, for Process 2. (i) Work-in-process, beginning inventory: -0- (ii) Transfer from Process 1: 15,000 units valued at $51.40 each (iii) Other manufacturing costs incurred during April: Direct material added                      $513,000Direct labour                                    $365,000Manufacturing overhead                 $211,000(iv) Normal losses were estimated to be 5% of input during the period. The scrap value of any loss is $40 per unit. (v) At inspection 1,750 units were rejected as scrap. These units had reached the following degree of completion:Input material                          100%Direct material added              50%Conversion costs                      30%(vi) 12,000 units were completed and transferred to Finished Goods Inventory. (vii) Work-in-process at the end of April had reached the following degree of completion:Input material                          100%Direct material added              80%Conversion costs                      40%Required:(a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Process 1 & Direct Material Added), and conversion costs and the cost per equivalent unit fordirect materials and conversion costs.  (b) Calculate the:- Total cost of units completed and transferred to Finished Goods inventory- Cost of abnormal losses- Cost of ending work-in-process inventory in Process 2  (c) Prepare Wilkin’s Work-In-Process Inventory - Process 2 T-account, clearly showing the ending balance.  (d) State the journal entries necessary to record the assignment of direct materials, direct manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal entries to record the cost of goods completed and transferred to finished goods.  (e) Given that 20% of the unexpected losses were as a result of pilferage, prepare the abnormal spoilage statement, clearly showing Wilkin Product’s true loss.

Question

PART 1 
G-Force Woodcraft manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labour intensive production process, so it assigns manufacturing overhead based on direct labour cost. G-Force expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2016. At the end of December 2018, G-Force reported work in process inventory (Job 551) of $93,000

The following events occurred during January 2019.
i) Purchased materials on account, $392,000
ii) Incurred manufacturing wages of $400,000
iii) Requisitioned direct materials and used direct labour in manufacturing
                            Direct Materials           Direct Labour
Job 551                $70,200                        $61,200
Job 552                $97,500                        $115,600
Job 553                $105,300                      $78,200
Job 554                $117,000                      $85,000

iv) Issued indirect materials to production, $30,000

v) Charged indirect manufacturing wages to production, $60,000

vi) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $134,000

vii) Allocated overheads to jobs at the predetermined rate


viii)Units completed: 551, 552 & 554


ix) Sold units 551 & 554 (billed customers at a margin of 33⅓% on sales)

Required:
(a) Compute G-Force’s predetermined manufacturing overhead rate for 2019.


(b) Calculate the total manufacturing costs for each job. 


(c) Using the total figures, record the above transactions in the general journal. 


(d) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly showing the balance before closing the account. State the journal entries necessary to dispose of the variance. Assume that the manufacturing overhead variance is immaterial. 


(e) What is the balance in the Cost of Goods Sold account after the adjustment? 


(f) Compute G-Forcer’s gross profit earned on the jobs, after adjusting for the manufacturing overhead variance 


(g) Post the appropriate entries to Work in Process Inventory account & determine the account balance on January 31. 

PART 2
Wilkin Products Ltd. makes a single product using two processes. Quality control check takes place during the process, at which point, rejected units are separated from good units.


The following details relate to production for the month of April 20X7, for Process 2.


(i) Work-in-process, beginning inventory: -0-


(ii) Transfer from Process 1: 15,000 units valued at $51.40 each


(iii) Other manufacturing costs incurred during April:

Direct material added                      $513,000
Direct labour                                    $365,000
Manufacturing overhead                 $211,000

(iv) Normal losses were estimated to be 5% of input during the period. The scrap value of any loss is $40 per unit.


(v) At inspection 1,750 units were rejected as scrap. These units had reached the following degree of completion:
Input material                          100%
Direct material added              50%
Conversion costs                      30%

(vi) 12,000 units were completed and transferred to Finished Goods Inventory.


(vii) Work-in-process at the end of April had reached the following degree of completion:
Input material                          100%
Direct material added              80%
Conversion costs                      40%

Required:
(a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Process 1 & Direct Material Added), and conversion costs and the cost per equivalent unit for
direct materials and conversion costs. 


(b) Calculate the:
- Total cost of units completed and transferred to Finished Goods inventory
- Cost of abnormal losses
- Cost of ending work-in-process inventory in Process 2 


(c) Prepare Wilkin’s Work-In-Process Inventory - Process 2 T-account, clearly showing the ending balance. 


(d) State the journal entries necessary to record the assignment of direct materials, direct manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal entries to record the cost of goods completed and transferred to finished goods. 


(e) Given that 20% of the unexpected losses were as a result of pilferage, prepare the abnormal spoilage statement, clearly showing Wilkin Product’s true loss.

Expert Answer

3 Ratings

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: E5 (Pension Entries) Assume that the actuarially required pension plan contribution for a county for...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: Journal Entries for Payment of Employer Payroll Taxes Jason Chen owns a business called Chen Home Bu...

A: Record journal entry for payment of employee federal income tax, social security and Medicare taxes ...

Q: Net sales revenue $280,000 Cost of goods sold 120,000 Beginning inventory 5,000 Ending invento...

A: Gross Profit is computed by subtracting the cost of goods sold from the sales revenue. Gross Profit ...

Q: Pinned below

A: a. Prepare journal entries in the books of Hip Pants.

Q: At the end of the current year. Accounts Receivable has a balance of $4,375,000; Allowance for Doubt...

A: Accounts receivable is the sum owed to an organization in lieu of the products or services provided ...

Q: Practice 5: Satellite Products, Inc. owns two subsidiaries, Saturn Systems and Neptune Audio. Saturn...

A: Case 1- Contribution Margin at Transfer Price of $40

Q: Vaughn Co. purchased land as a factory site for $456,000. The process of tearing down two old buildi...

A: Calculate the cost of land.

Q: Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpe...

A: Compute cost assigned to ending inventory under LIFO method as shown below:

Q: Brief Exercise 8-07 Consider these transactions: (Credit account titles are automatically indented ...

A: (a)Prepare journal entry in the books of Blossom Company: 

Q: I have attached the Income Statement I will be referring to.  Please explain and clarify 1) What acc...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: Exercise 8-07 On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of...

A: Click to see the answer

Q: Which of the following is not subject to self-employment tax? a. Gain on the sale of real estate hel...

A: Self-employment tax: It is a tax levied on the income generated from self-employment. A tax of 12.4 ...

Q: Find the simple interest. Assume a 360-day year. Round results to the nearest cent. 1) $3180 at 5% f...

A: Simple interest on principal amount is calculated using the formula:

Q: conduct horizontal and vertical analyses for the balance sheet and income statement accounts and rep...

A: 1) Prepare the horizontal analysis to analyze the changes in Starbucks’ fixed assets, intangible ass...

Q: Required information   [The following information applies to the questions displayed below.]   Louis...

A: Gross Income:According to U.S. Internal Revenue Code, gross income is defined as “all income derived...

Q: If the contribution margin ratio is 55%, target operating income is $30,000, and the sales revenue n...

A:  As per the question we know that contribution margin ratio is 55%Contribution margin ratio= Contrib...

Q: September 30   2022   2021 Accounts receivable for member dues   $19,400   $12,900 Unearn...

A: Unearned revenue is amount acquired by an individual or organization for an assistance or item that ...

Q: How do you find the amount of payment to be credited and the balance outstanding when you know the a...

A: GivenInvoice Value = $600Invoice Date = 7/5Conditions for Payment = 4/10 and n/60This condition mean...

Q: Support Department Cost Allocation—Reciprocal Services Method Blue Africa Inc. produces laptops and ...

A: Click to see the answer

Q: Problem 6-12 (Algorithmic)The Individual Alternative Minimum Tax (AMT) (LO 6.5) Otto and Monica are ...

A: AMTI is calculated based on alternative minimum taxable income which includes all the taxable income...

Q: Just part B

A: Working:

Q: 1-9 (4) Revenues for 2028 $97,000 Dividends declared in 2028 $0 Expenses for 2028 unknown Jan 1 reta...

A:  Retained earnings: Retained earnings are that portion of profits which are earned by a company but ...

Q: Irons Delivery Inc. purchased a new delivery truck for $45,000 on January 1, 2013. The truck is expe...

A: Determine depreciation expense for each mile driven.

Q: Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in ...

A: Activity based costing is a cost allocation method where overhead and indirect cost are allocated on...

Q: 3 and 4

A: Note 1: We will answer the first question according to our honor code. Please submit a new question ...

Q: Calculation and Journal Entry for Employer Payroll Taxes 1.  Calculate the employer's payroll taxes ...

A: Employer payroll tax expense:

Q: How do you find the date goods received, last day of the discount period, and end of credit period w...

A: Compute the last day of the discount period, and end of credit period:Discount period:In this case, ...

Q: Inventory information for Part 311 of Concord Corp. discloses the following information for the mont...

A: Calculate cost of goods sold and ending inventory under (1) LIFO and (2) FIFO, assuming periodic inv...

Q: Salt Company manufactures products J, K, and L in a joint process. The company incurred $480,000 of ...

A: Joint Cost represent the value of cost incurred till the products are spilt. These costs are allocat...

Q: In the month of August, Beauty Salon services 560 clients at an average price of $120. During the mo...

A: Contribution Margin is the ability of the company to cover its variable cost. It is the balance  amo...

Q: Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove...

A: Hence, 20,300 units is the breakeven sales  which is calculated by dividing total fixed costs with t...

Q: I can not figure out how to work the attached problem

A: Step 1: Determine the budgeted sales revenue

Q: Your answer is partially correct.  Try again.     Included in the December 31 trial balance of ...

A: Liquidity depicts how fast an asset can be immediately purchased or sold in the market at a value mi...

Q: Assignment Gradebook Downloadable eTextbook ORION t Brief Exercise 19-12 Your answer is partially co...

A: Income Tax Refund:A tax refund is the difference between taxes paid and taxes owed. Each year a taxp...

Q: Topple Corporation leases skyscrapers in cities throughout the world to large corporations. Topple's...

A: Debt FinancingDebt financing means when a firm raises money for working capital or capital expenditu...

Q: Required information   [The following information applies to the questions displayed below.]George a...

A: Click to see the answer

Q: Novak Company’s record of transactions for the month of April was as follows. Purchases   Sale...

A: Inventory Valuation:"LIFO" stands for last-in, first-out, meaning that the recently purchased invent...

Q: Do part 1 and 2 journal entries

A: In case of a credit sale, the customer is given an option to make payment for the sale within a spec...

Q: Adjusted Trial Balance     December 31, 2014               Debit Credit Cash         6,590   ...

A: Income statement: The financial statement which reports revenues and expenses from business operatio...

Q: Braganza Enterprise uses a perpetual inventory system and has a highly labour intensive production p...

A: As the student has posted multiple questions and not mentioned which question to be answered, the so...

Q: Sales last year for a department were $98,600. This year planned sales are forecast to decrease by 1...

A: Compute forecasted decrease in sales as shown below:

Q: how do you calculate the net income

A: Revenues: Revenues are earnings from operations of a business. The operating activities are sale of ...

Q: Number 4 Smithson, Inc. produces two types of gas grills: a family model and a deluxe model. Smithso...

A: Hi, since there are multiple requirements in the posted question, we will answer first three questio...

Q: Novak Company’s record of transactions for the month of April was as follows. Purchases   Sale...

A: Prepare a schedule to determine the total units available for sale and cost of goods available for s...

Q: Break-Even Sales Currently, the unit selling price of a product is $390, the unit variable cost is $...

A: Break-even sales are the dollar measure of income at which a business procures a benefit of zero. Th...

Q: What part of the A=L +SE does expenses and revenues under and are they CR or DR balances? Expenses c...

A: The accounting equation shows that sum of all assets= sum of liabilities + sum of owner's /stockhold...

Q: Federal Income Tax WithholdingBob Browning's weekly gross earnings for the present week were $2,770....

A: Calculate the amount of federal income tax with holdings:

Q: Process Cost Journal Entries The cost of materials transferred into the Rolling Department of Keysto...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: Lower of Cost or Market Garcia Company's inventory at the end of the year was recorded in its accoun...

A: Lower of Cost or market (LCM):The lower of cost or market rule states that a business must record th...

Q: Skysong Company uses a periodic inventory system. For April, when the company sold 540 units, the fo...

A: Inventory Valuation under FIFO:"FIFO" stands for first-in, first-out, meaning that the oldest invent...