BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

Solutions

Chapter
Section
BuyFindarrow_forward

Accounting

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:

images

In addition, the following information is available:

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

images

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:

images

Instructions

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

images

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

(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.

To determine: the missing amounts associated with each letter.

Explanation

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,

(2)

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

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Why is the American economy called a mixed economy?

Foundations of Business (MindTap Course List)

What does the invisible hand of the marketplace do?

Principles of Microeconomics (MindTap Course List)

What information is included in an employees individual earnings record?

College Accounting (Book Only): A Career Approach

LOAN AMORTIZATION AND EAR You want to buy a car. and a local bank will lend you 20,000. The loan will be fully ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)