Concept explainers
Analyzing
Summer Boards Company manufactures surf boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for May:
In addition, the following information is available:
- Materials and direct labor were applied to six jobs in May:
b.Factory
c.The May 1 Work in Process balance consisted of two jobs, as follows:
d. Customer jobs completed and units sold in May were as follows:
Instructions
Determine the missing amounts associated with each letter. Provide supporting calculations by completing a table with the following headings:
Concept Introduction:
Direct Cost:
The cost which is directly related to the product and affects those items directly which contribute to the revenue generation in the business is referred as direct cost.It makes a direct relation to the manufacturing cost.
Indirect Cost:
The cost which is not directly related to the product and does not affect those items directly which contribute to the revenue generation in the business is referred as indirect cost. These can be fixed costs or such costs that are incurred as a whole and cannot be related to manufacturing cost.
The missing items in regard to the manufacturing costs SB Company.
Answer to Problem 10.4.1P
The following table represents items in regard to the manufacturing costs SB Company:
Job no. | Quantity | May work in process | Direct Material | Direct Labor | Factory overhead | Total cost | Unit cost | Units sold | Cost of goods sold |
Explanation of Solution
The material requisition will be the cost of direct material incurred during the year. So, the material requisition is
The work in process at the beginning is given which is
The material work in process balance will be the cost of direct material incurred during the year for the jobs not completed i.e. job no.
The direct labor work in process balance will be the cost of direct labor incurred during the year for the jobs not completed i.e. job no.
The factory overhead work in process balance will be the factory overhead incurred during the year for the jobs not completed i.e. job no.
The factory overhead balance applied in total will be the factory overhead incurred during the year i.e.
Job no. | Quantity | Units sold | Unsold quantity | Direct Material | Direct Labor | Factory overhead | Total cost | Unit cost | Cost of goods sold |
The balance of completed jobs is
Job no. | Quantity | Total cost | Unit cost | Units sold | Cost of goods sold |
The balance of cost of goods sold of finished goods is
The balance of indirect labor to be transferred to the factory overhead will be the difference of the total wages payable and the direct labor i.e.
Want to see more full solutions like this?
Chapter 10 Solutions
Bundle: Survey of Accounting, Loose-Leaf Version, 8th + CengageNOWv2, 1 term Printed Access Card
- Kokomo Kayak Inc. uses the process cost system. The following data, taken from the organizations books, reflect the results of manufacturing operations during the month of March: Production Costs Work in process, beginning of period: Costs incurred during month: Production Data: 18,000 units finished and transferred to stockroom. Work in process, end of period, 3,000 units, two-thirds completed. Required: Prepare a cost of production summary for March.arrow_forwardDublin Brewing Co. uses the process cost system. The following data, taken from the organizations books, reflect the results of manufacturing operations during October: Production Costs Work in process, beginning of period: Costs incurred during month: Production Data: 13,000 units finished and transferred to stockroom Work in process, end of period, 2,000 units one-half completed Required: Prepare a cost of production summary for October.arrow_forwardLeMans Company produces specialty papers at its Fox Run plant. At the beginning of June, the following information was supplied by its accountant: During June, direct labor cost was 143,000, direct materials purchases were 346,000, and the total overhead cost was 375,800. The inventories at the end of June were: Required: 1. Prepare a cost of goods manufactured statement for June. 2. Prepare a cost of goods sold schedule for June.arrow_forward
- Cost of Direct Materials, Cost of Goods Manufactured, Cost of Goods Sold Bisby Company manufactures fishing rods. At the beginning of July, the following information was supplied by its accountant: During July, the direct labor cost was 43,500, raw materials purchases were 64,000, and the total overhead cost was 108,750. The inventories at the end of July were: Required: 1. What is the cost of the direct materials used in production during July? 2. What is the cost of goods manufactured for July? 3. What is the cost of goods sold for July?arrow_forwardAnalyzing manufacturing cost accounts Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May: In addition, the following information is available: A. Materials and direct labor were applied to six jobs in May: B. Factory overhead is applied to each job at a rate of 50% of direct labor cost. C. The May 1 Work in Process balance consisted of two jobs, as follows: D. Customer jobs completed and units sold in May were as follows: Instructions 1. Determine the missing amounts associated with each letter. Provide supporting computations by completing a table with the following headings: 2. Determine the May 31 balances for each of the inventory accounts and factory overhead.arrow_forwardBangor Products Co. obtained the following information from its records for April: Required: 1. Prepare, in summary form, the journal entries that would have been made during the month to record issuing materials to production, the distribution of labor, and overhead costs; the completion of the jobs; and the sale of the jobs. 2. Prepare schedules computing the following for April: a. The gross profit or loss for each job completed and for the business as a whole. b. For each job, the gross profit or loss per unit. (Round to the nearest cent.)arrow_forward
- Basic Cost Flows Linsenmeyer Company produces a common machine component for industrial equipment in three departments: molding, grinding, and finishing. The following data are available for September: During September, 18,000 components were completed. There is no beginning or ending WIP in any department. Required: 1. Prepare a schedule showing, for each department, the cost of direct materials, direct labor, applied overhead, product transferred in from a prior department, and total manufacturing cost. 2. Calculate the unit cost. (Note: Round the unit cost to two decimal places.)arrow_forwardSpokane Production Co. obtained the following information from its records for July: Required: 1. Prepare, in summary form, the journal entries that would have been made during the month to record issuing materials to production, the distribution of labor, and overhead costs; the completion of the jobs; and the sale of the jobs. 2. Prepare schedules computing the following for July: a. The gross profit or loss for each job completed and sold, and for the business as a whole. b. For each job, the gross profit or loss per unit. (Round to the nearest cent.)arrow_forwardWork in process account data for two months; cost of production reports Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in ProcessRolling on September 1 and debits to the account during September were as follows: During September, 2,600 units in process on September 1 were completed, and of the 28,900 units entering the department, all were completed except 2,900 units that were 45 completed. Charges to Work in ProcessRolling for October were as follows: During October, the units in process at the beginning of the month were completed, and of the 31,000 units entering the department, all were completed except 2,000 units that were 25 completed. Instructions 1. Enter the balance as of September 1 in a four-column account for Work in ProcessRolling. Record the debits and the credits in the account for September. Construct a cost of production report and present computations for determining (A) equivalent units of production for materials and conversion, (B) costs per equivalent unit, (C) cost of goods finished, differentiating between units started in the prior period and units started and finished in September, and (D) work in process inventory. 2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report, and present the October computations (A through D) listed in part (1). 3. Comment on the change in costs per equivalent unit for August through October for direct materials and conversion cost.arrow_forward
- Channel Products Inc. uses the job order cost system of accounting. The following is a list of the jobs completed during March, showing the charges for materials issued to production and for direct labor. Assume that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 200%. Required: Compute the amount of overhead to be added to the cost of each job completed during the month. Compute the total cost of each job completed during the month. Compute the total cost of producing all the jobs finished during the month.arrow_forwardApplying factory overhead Bergan Company estimates that total factory overhead costs will be 620,000 for the year. Direct labor hours are estimated to be 80,000. For Bergan Company, (A) determine the predetermined factory overhead rate using direct labor hours as the activity base, (B) determine the amount of factory overhead applied to Jobs 200 and 305 in May using the data on direct labor hours from BE 16-2, and (C) prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate.arrow_forwardDaytona Beverages Inc. uses the FIFO cost method and adds all materials, labor, and factory overhead evenly to production. A record of the factory operations for October follows: Required: Prepare a cost of production summary for the month.arrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning