Concept explainers
(a)
Introduction:
In cost accounting, various production stages of manufacturing a product are identified. Thus, manufacturing costs are recorded at such production processes to reflect appropriate apportionment of costs.
To record:
The transactions in T-shape accounts.
Explanation of Solution
Raw Materials Inventory:
Particulars | $ (Debit) | Particulars | $ (Credit) |
(a) Purchases | 20,000 | (b) Materials issued (job 201) | 12,000 |
(b) Materials issued (job 201) | 21,000 | ||
(b) Indirect materials | 3,200 |
Work in process Inventory
Particulars | $ (Debit) | Particulars | $ (Credit) |
(b) Materials issued (job 201) | 12,000 | ||
(b) Materials issued (job 202) | 21,000 | ||
(c) Direct labor (job 201) | 2,150 | ||
(c) Direct labor (job 202) | 10,750 | ||
(d) Applied overhead (600×$25) | 15,000 |
Finished Goods Inventory:
Particulars | $ (Debit) | Particulars | $ (Credit) |
Completed and transferred (job 201) | 16,650 |
Manufacturing Overhead:
Particulars | $ (Debit) | Particulars | $ (Credit) |
(b) Indirect materials | 3,200 | (d) Applied overhead (600×$25) | 15,000 |
(c) Factory supervision | 5,000 |
Sales Revenue:
Particulars | $ (Debit) | Particulars | $ (Credit) |
(i) Sales (job 200) | 31,000 |
(b)
Introduction:
Manufacturing Costs:
In cost accounting, various production stages of manufacturing a product are identified. Thus, manufacturing costs are recorded at such production processes to reflect appropriate apportionment of costs.
To prepare:
The T-accounts and calculate their ending balances.
Explanation of Solution
Raw Materials Inventory:
Particulars | $ (Debit) | Particulars | $ (Credit) |
Opening Balance | 32,000 | (b) Materials issued (job 201) | 12,000 |
(a) Purchases | 20,000 | (b) Materials issued (job 202) | 21,000 |
(b) Indirect materials | 3,200 | ||
Closing Balance | 15,800 | ||
52,000 | 52,000 | ||
Opening Balance | 15,800 |
Work in process Inventory
Particulars | $ (Debit) | Particulars | $ (Credit) |
Opening Balance | 15,500 | (f) Completed and transferred to finished goods (Job 201) | 16,650 |
(b) Materials issued (job 201) | 12,000 | Closing Balance | 59,750 |
(b) Materials issued (job 202) | 21,000 | ||
(c) Direct labor (job 201) | 2,150 | ||
(c) Direct labor (job 202) | 10,750 | ||
(d) Applied overhead (100×$25) | 2,500 | ||
(d) Applied overhead (500×$25) | 12,500 | ||
76,400 | 76,400 | ||
Opening Balance | 59,750 |
Finished Goods Inventory:
Particulars | $ (Debit) | Particulars | $ (Credit) |
Opening Balance | 20,000 | Closing Balance | 34,150 |
(f) Completed and transferred (job 201) | 14,150 | ||
34,150 | 34,150 | ||
Opening Balance | 34,150 |
Manufacturing Overhead:
Particulars | $ (Debit) | Particulars | $ (Credit) |
(b) Indirect materials | 3,200 | (d) Applied overhead (600×$25) | 15,000 |
(c) Factory supervision | 5,000 | ||
Closing Balance | 6,800 | ||
15,000 | 15,000 | ||
Over applied | 6,800 |
Cost of Goods Sold:
(As per the question, there are no details available regarding the cost of sale of Job 200. Hence, it has been left unbalanced based on the available information.)
Particulars | $ (Debit) | Particulars | $ (Credit) |
Over applied | 6,800 |
Miscellaneous Accounts:
Particulars | $ (Debit) | Particulars | $ (Credit) |
(e) Factory rent | 3,100 | (e) Factory insurance | 1,250 |
(e) |
2,500 | Closing Balance | 6,100 |
(e) Factory utilities | 1,750 | ||
7,350 | 7,350 | ||
Opening Balance | 6,100 |
Sales Revenue:
Particulars | $ (Debit) | Particulars | $ (Credit) |
Closing Balance | 31,000 | (g) Sales (job 200) | 31,000 |
31,000 | 31,000 | ||
Opening Balance | 31,000 |
(c)
Introduction:
Manufacturing Costs:
In cost accounting, various production stages of manufacturing a product are identified. Thus, manufacturing costs are recorded at such production processes to reflect appropriate apportionment of costs.
To calculate:
The cost of goods manufactured.
Explanation of Solution
Cost of Goods Manufactured (For Job 201 and 202)
(As per the question, the ratio of both the jobs isn’t available to segregate the purchases, use of indirect materials and various other factors. Thus, the question has been solved considering all the values equally for each job.)
Particulars | Job 201 ($) | Job 202 ($) |
Beginning raw material inventory | 32,000 | 32,000 |
(+) Raw material purchases | 10,000 | 10,000 |
(-) Indirect materials | (1,600) | (1,600) |
(-) Ending raw material inventory | (28,400) | (19,400) |
Direct material used | 20,400 | 21,000 |
Direct labor | 2,150 | 10,750 |
Manufacturing overhead applied | 2,500 | 12,500 |
Total current manufacturing costs | 26,650 | 44,750 |
(+) Beginning work in process inventory | 15,500 | 15,500 |
(-) Ending work in process inventory | (16,550) | (44,250) |
Cost of goods manufactured. | 14,000 | 16,000 |
The cost of goods manufactured are shown in the ‘cost of goods sold’ account to calculate the adjusted cost of goods sold and determine the profit, thereof.
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Chapter 2 Solutions
WHITECOTTON MGRL ACCTG (LL)
- Entries and schedules for unfinished jobs and completed jobs Hildreth Company uses a job order cost system. The following data summarize the operations related to production for April, the first month of operations: A. Materials purchased on account, 147,000. B. Materials requisitioned and factory labor used: C. Factory overhead costs incurred on account, 6,000. D. Depreciation of machinery and equipment, 4,100. E. The factory overhead rate is 40 per machine hour. Machine hours used: F. Jobs completed: 101, 102, 103, and 105. G. Jobs were shipped and customers were billed as follows: Job 101, 62,900; Job 102, 80,700; Job 105, 45,500. Instructions 1. Journalize the entries to record the summarized operations. 2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. 3. Prepare a schedule of unfinished jobs to support the balance in the work in process account. 4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.arrow_forwardEntries and schedules for unfinished jobs and completed jobs Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations: A. Materials purchased on account, 45,000. B. Materials requisitioned and factory labor used: C. Factory overhead costs incurred on account, 1,800. D. Depreciation of machinery and equipment, 2,500. E. The factory overhead rate is 30 per machine hour. Machine hours used: F. Jobs completed: 301, 302, 303, and 305. G. Jobs were shipped and customers were billed as follows: Job 301, 8,500; Job 302, 16,150; Job 303, 13,400. Instructions 1. Journalize the entries to record the summarized operations. 2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. 3. Prepare a schedule of unfinished jobs to support the balance in the work in process account. 4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.arrow_forwardTerrills Transmissions uses a job order cost system. A partial list of the accounts being maintained by the company, with their balances as of November 1, follows: The following transactions were completed during November: a. Materials purchases on account during the month, 74,000. b. Materials requisitioned during the month: 1. Direct materials, 57,000. 2. Indirect materials, 11,000. c. Direct materials returned by factory to storeroom during the month, 1,100. d. Materials returned to vendors during the month prior to payment, 2,500. e. Payments to vendors during the month, 68,500. Required: 1. Prepare general journal entries for each of the transactions. 2. Post the general journal entries to T-accounts. 3. Balance the accounts and report the balances of November 30 for the following: a. Cash b. Materials c. Accounts Payablearrow_forward
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