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Analyzing 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 the following 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: Job No. Style Work In Process, May 1 101 AF1 $26,400 102 AF3 46,400 Total $72,400 d. Customer jobs completed and units sold in May were as follows: Instructions 1. Determine the missing amounts associated with each letter. Provide supporting calculations by completing a table with the following headings: 2. Determine the May 31 balances for each of the inventory accounts and factory overhead.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 19, Problem 19.4BPR
Textbook Problem

Analyzing 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:

Chapter 19, Problem 19.4BPR, Analyzing manufacturing cost accounts Clapton Company manufactures custom guitars in a wide variety , example  1

In addition, the following information is available:

a. Materials and direct labor were applied to the following jobs in May:

Chapter 19, Problem 19.4BPR, Analyzing manufacturing cost accounts Clapton Company manufactures custom guitars in a wide variety , example  2

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:

Job No. Style Work In Process, May 1
101 AF1 $26,400
102 AF3 46,400
Total $72,400

d. Customer jobs completed and units sold in May were as follows:

Chapter 19, Problem 19.4BPR, Analyzing manufacturing cost accounts Clapton Company manufactures custom guitars in a wide variety , example  3

Instructions

1. Determine the missing amounts associated with each letter. Provide supporting calculations by completing a table with the following headings:

Chapter 19, Problem 19.4BPR, Analyzing manufacturing cost accounts Clapton Company manufactures custom guitars in a wide variety , example  4

2. Determine the May 31 balances for each of the inventory accounts and factory overhead.

Expert Solution

(1)

To determine

Job order costing: Job order cost system provides a separate record of each particular quantity of product that passes through the factory. Each quantity that is manufactured in the business is known as job. Job order costing is used when the products produced are significantly different from each other.

the missing amounts associated with each letter.

Explanation of Solution

The cost accounts are calculated as under:

 Missing TermsAmount ($)
(a)Material requisition, Balance as on May 31(Working note 1)586,100
(b)Work in process, Balance as on May 01Figure (1)72,400
(c)Direct material cost, Balance as on May 31Figure (1)570,700
(d)Direct labor cost, Balance as on May 31Figure (1)378,400
(e)Factory overhead applied, Balance as on May 31Figure (1)189,200
(f)Completed Jobs, Balance as on May 31(Working note 2)801,500
(g)Cost of goods sold Figure (1)700,284
(h)Indirect labor, Balance as on May 31(Working note 3)17,600

Table (1)

Working note:

The supporting calculations are prepared as follows:

Figure (1)

Working note 1: The material requisition is calculated as follows:

Material requisition = Direct material cost + Indirect material cost used= $570,700 + $15,400$586,100<

Expert Solution

(2)

To determine

the ending balances for each inventory accounts and factory overhead.

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Chapter 19 Solutions

Accounting
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Ch. 19 - Issuance of materials On May 7, Bergan Company...Ch. 19 - Issuance of materials On August 4, Rothchild...Ch. 19 - Direct labor costs During May, Bergan Company...Ch. 19 - Direct labor costs During August, Rothchild...Ch. 19 - Factory overhead costs During May, Bergan Company...Ch. 19 - Factory overhead costs During August, Rothchild...Ch. 19 - Applying factory overhead Bergan Company estimates...Ch. 19 - Applying factory overhead Rothchild Company...Ch. 19 - Job costs At the end of May, Bergan Company had...Ch. 19 - Job costs At the end of August, Rothchild Company...Ch. 19 - Transactions in a job order cost system Five...Ch. 19 - Cost of materials issuances under the FIFO method...Ch. 19 - Entry for issuing materials Materials issued for...Ch. 19 - Entries for materials GenX Furnishings...Ch. 19 - Entry for factory labor costs A summary of the...Ch. 19 - Entry for factory labor costs The weekly time...Ch. 19 - Entries for direct labor and factory overhead...Ch. 19 - Factory overhead rates, entries and account...Ch. 19 - Predetermined factory overhead rate Street....Ch. 19 - Predetermined factory overhead rate Poehling...Ch. 19 - Entry for jobs completed; cost of unfinished jobs...Ch. 19 - Entries for factory costs and jobs completed Old...Ch. 19 - Financial statements of a manufacturing firm The...Ch. 19 - Decision making with job order costs Alvarez...Ch. 19 - Decision making with job order costs Raneri...Ch. 19 - Job order cost accounting for a Service company...Ch. 19 - Job order cost accounting for a service company...Ch. 19 - Entries for costs in a job order cost system...Ch. 19 - Entries and schedules for unfinished jobs and...Ch. 19 - Job order cost sheet Remnant Carpet Company sells...Ch. 19 - Analyzing manufacturing cost accounts Fire Rock...Ch. 19 - Flow of costs and income statement Ginocera Inc....Ch. 19 - Entries for costs in a job order cost system Royal...Ch. 19 - Entries and schedules for unfinished Jobs and...Ch. 19 - Job order cost sheet Stretch and Trim Carpet...Ch. 19 - Analyzing manufacturing cost accounts Clapton...Ch. 19 - Flow of costs and income statement Technology...Ch. 19 - Communication TAC Industries sells heavy equipment...Ch. 19 - Predetermined overhead rates As an assistant cost...Ch. 19 - Communication Carol Creedence, the plant manager...Ch. 19 - Job order decision making and rate deficiencies...Ch. 19 - Recording manufacturing costs Todd Lay just began...

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