27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
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:


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:



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.


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.

To determine: the missing amounts associated with each letter.


The cost accounts are calculated as under:

  Missing Terms Amount ($)
(a) Material requisition, Balance as on May 31(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(2) 801,500
(g) Cost of goods soldFigure (1) 700,284
(h) Indirect labor, Balance as on May 31(3) 17,600

Table (1)

Working note:

The supporting calculations are prepared as follows:

Figure (1)

The material requisition is calculated as follows:

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


To determine
the ending balances for each inventory accounts and factory overhead.

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