Purl of Great Price Company Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces high-end knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters (each of whom work 40 hours per week) and one office manager/knitting supervisor (this employee works 20 hours per week as office manager, and 20 hours per week as knitting supervisor). All wages are paid in cash at the end of each month. Each knitter has a knitting machine that is used about 2/3 of the knitter’s time, the rest of the knitter’s time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the office manager/knitting supervisor approximately 5 hours per week. The knitting machines were purchased on January 1 of the current year, and cost $2,400 each, with an anticipated useful life of 10 years and no salvage value. The packaging machine was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value. Question Content Area Nov. 30 Trial Balance POGP Company Trial Balance November 30, 20Y8 Account Title Debit Credit Cash 20,000 Accounts Receivable 1,000 Supplies 200 Materials 5,000 Work in Process 5,404 Equipment 12,000 Accumulated Depreciation-Equipment 825 Accounts Payable 150 Common Stock 10,000 Retained Earnings 12,000 Dividends 18,096 Sales 307,500 Cost of Goods Sold 255,040 Factory Overhead 15 Wages Expense 13,750 330,490 330,490 Predetermined Factory Overhead Rate Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH). Estimated Selected Amounts for the Year Estimated depreciation on equipment $1,200 Estimated total Office Manager/Knitting Supervisor wages $42,000 Estimated office utilities $4,000 Estimated factory utilities $4,800 Estimated factory rent $24,000 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 Compute the predetermined factory overhead rate for the current year.
Purl of Great Price Company
Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces high-end knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters (each of whom work 40 hours per week) and one office manager/knitting supervisor (this employee works 20 hours per week as office manager, and 20 hours per week as knitting supervisor). All wages are paid in cash at the end of each month.
Each knitter has a knitting machine that is used about 2/3 of the knitter’s time, the rest of the knitter’s time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the office manager/knitting supervisor approximately 5 hours per week.
The knitting machines were purchased on January 1 of the current year, and cost $2,400 each, with an anticipated useful life of 10 years and no salvage value. The packaging machine was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value.
Question Content Area
Nov. 30
| POGP Company Trial Balance November 30, 20Y8 |
||
| Account Title | Debit | Credit |
| Cash | 20,000 | |
| 1,000 | ||
| Supplies | 200 | |
| Materials | 5,000 | |
| Work in Process | 5,404 | |
| Equipment | 12,000 | |
| Accumulated |
825 | |
| Accounts Payable | 150 | |
| Common Stock | 10,000 | |
| 12,000 | ||
| Dividends | 18,096 | |
| Sales | 307,500 | |
| Cost of Goods Sold | 255,040 | |
| Factory Overhead | 15 | |
| Wages Expense | 13,750 | |
| 330,490 | 330,490 |
Predetermined Factory Overhead Rate
Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH).
| Estimated Selected Amounts for the Year | |
| Estimated depreciation on equipment | $1,200 |
| Estimated total Office Manager/Knitting Supervisor wages | $42,000 |
| Estimated office utilities | $4,000 |
| Estimated factory utilities | $4,800 |
| Estimated factory rent | $24,000 |
| Activity Base Data | |
| Estimated number of DLH for the year | 5,000 |
| Estimated number of MH for the year | 3,500 |
Compute the predetermined factory overhead rate for the current year.
Question Content Area
| Materials Requisition | Date: Dec. 10 | ||
| Req. No. 12255 | Job No. 83 | ||
| Description | Qty. Issued | Unit Price | Amount |
| Yarn type B | 700 skeins | $5 | $3,500 |
| Total issued | $3,500 |
| Time Ticket | No. 1255 | Name: | Susan Blake | |
| Work Description: | Knitting/piecing | |||
| Dates | Job No. | Hours Worked | Unit Price | Amount |
| 12/01-12/15 | 62 | 65 | $15 | $975 |
| 12/16-12/31 | 83 | 103 | 15 | 1,545 |
| Total Cost | $2,520 |
| Time Ticket | No. 2274 | Name: | Josh Porter | |
| Work Description: | Knitting/piecing | |||
| Dates | Job No. | Hours Worked | Unit Price | Amount |
| 12/01-12/15 | 62 | 75 | $15 | $1,125 |
| 12/16-12/31 | 83 | 88 | 15 | 1,320 |
| Total Cost | $2,445 |
| Time Ticket | No. 3923 | Name: | Mary Jones | |
| Work Description: | Knitting/piecing | |||
| Dates | Job No. | Hours Worked | Unit Price | Amount |
| 12/01-12/15 | 62 | 60 | $15 | $900 |
| 12/16-12/31 | 83 | 109 | 15 | 1,635 |
| Total Cost | $2,535 |
On December 10, POGP Company receives an order for 200 sweater vests and assigns Job 83 to the order. Review the Materials Requisition table to add the materials to the Job Cost Sheet for Job 83.
On December 15, review the Time Ticket tables to add the appropriate amount of direct labor and
On December 31, the last work day of the year for the knitters, review Time Ticket tables to add the appropriate amount of direct labor and factory overhead costs to the Job Cost Sheet for Job 83 for the period December 16 through December 31.
If there is no amount or an amount is zero, enter "0". If required, round your answers to the nearest cent.
| Job 62 | 100 units: | Sweaters | ||
| Direct Materials | Direct Labor | Factory Overhead | Total | |
| Balance Dec. 1 | $5,000 | $300 | $104 | $5,404 |
| Dec. 15 | fill in the blank 160f7d024fe3f98_1 | fill in the blank 160f7d024fe3f98_2 | fill in the blank 160f7d024fe3f98_3 | fill in the blank 160f7d024fe3f98_4 |
| Total Cost | $fill in the blank 160f7d024fe3f98_5 | $fill in the blank 160f7d024fe3f98_6 | $fill in the blank 160f7d024fe3f98_7 | $fill in the blank 160f7d024fe3f98_8 |
| Unit Cost | $fill in the blank 160f7d024fe3f98_9 |
| Job 83 | 200 units: | Sweater vests | ||
| Direct Materials | Direct Labor | Factory Overhead | Total Job Cost | |
| Balance Dec. 1 | $0 | $0 | $0 | $0 |
| Dec. 10 | fill in the blank 160f7d024fe3f98_10 | fill in the blank 160f7d024fe3f98_11 | fill in the blank 160f7d024fe3f98_12 | fill in the blank 160f7d024fe3f98_13 |
| Dec. 31 | fill in the blank 160f7d024fe3f98_14 | fill in the blank 160f7d024fe3f98_15 | fill in the blank 160f7d024fe3f98_16 | fill in the blank 160f7d024fe3f98_17 |
| Total Cost | $fill in the blank 160f7d024fe3f98_18 | $fill in the blank 160f7d024fe3f98_19 | $fill in the blank 160f7d024fe3f98_20 | $fill in the blank 160f7d024fe3f98_21 |
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