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) QUESTIONS (1) 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.  (2) What is the balance in the Cost of Goods Sold account after the adjustment?  (3)Compute G-Forcer’s gross profit earned on the jobs, after adjusting for the manufacturing overhead variance  (4) Post the appropriate entries to Work in Process Inventory account & determine the account balance on January 31.

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter26: Manufacturing Accounting: The Job Order Cost System
Section: Chapter Questions
Problem 2SEB: SCHEDULE OF COST OF GOODS MANUFACTURED The following information is supplied for Sanchez Welding and...
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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)

QUESTIONS


(1) 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. 


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


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


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

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