# 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.

### Accounting

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

### Accounting

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

#### Solutions

Chapter
Section
Chapter 19, Problem 19.4BPR
Textbook Problem

## Analyzing manufacturing cost accountsClapton 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:Instructions1. 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.

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:

 Â Missing Terms Amount ($) (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: MaterialÂ requisitionÂ =Â DirectÂ materialÂ costÂ +Â IndirectÂ materialÂ costÂ used=Â$570,700Â +Â $15,400=Â$586,100<

Expert Solution

(2)

To determine

the ending balances for each inventory accounts and factory overhead.

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