Title: Problem 19-1A
QA_Ori:
Part 1 Total manufacturing costs and the costs assigned to each job
306 307 308 April Total
From March
Direct materials……………………$ 29,000 $ 35,000
Direct labor…………………………. 20,000 18,000
*Equals 50% of direct labor cost.
Part 2 Journal entries for April
a. Raw Materials Inventory……………………………………………500,000
Accounts Payable………………………………………………. 500,000
To record materials purchases.
a. Factory Overhead…………………………………………………….19,000
b. Goods in Process Inventory………………………………………455,000
Raw Materials Inventory……………………………………… 455,000
To assign direct materials to jobs.
c. Finished Goods Inventory (306 & 307)…………………………828,500
d. Cost of Goods Sold (306)………………………………………….321,500
e. Cash………………………………………………………………………635,000
f. Cost of Goods Sold………………………………………………….5,000
Factory Overhead*…………………………………………….. 5,000
To assign underapplied overhead.
Part 3
CIOLINO COMPANY
Manufacturing Statement
For Month Ended April 30
Direct materials used…………………………………………………………….. $ 455,000
Direct labor used………………………………………………………………….. 340,000
Factory overhead
Indirect materials………………………………………………………………..$50,000
*Alternatively, the underapplied overhead can be listed among factory overhead items.
Part 4
Gross profit on the income statement for the month ended April 30
Sales………………………………………………………………………………………………. $ 635,000
Presentation of inventories on the April 30 balance sheet
Inventories
* Beginning raw materials inventory…………………………………………………………………$ 80,000
Purchases………………………………………………………………………………………………….500,000
Gross profit $308,500
Part 5
QA_Ori: Overhead is underapplied by $5,000, meaning that individual jobs or batches of
jobs are under-costed. Thus, profits at the job (and batch) level are overstated.
Title: Problem 19-2A
QA_Ori:
Part 1
a.
Dec. 31 Goods in Process Inventory………………………………………28,800
b.
Dec. 31 Goods in Process Inventory………………………………………59,800
c.
Dec. 31 Goods in Process Inventory………………………………………119,600
d.
Dec. 31 Factory Overhead…………………………………………………….5,600
e.
Dec. 31 Factory Overhead…………………………………………………….8,200
Part 2
Revised Factory Overhead account
Ending balance from trial balance……………………………………………$115,000 debit
Dec. 31 Cost of Goods Sold………………………………………………….9,200
Factory Overhead………………………………………………. 9,200
To close underapplied overhead.
Part 3
FARINA BAY COMPANY
Trial Balance
December 31, 2013
Debit Credit
Cash …………………………………………………………………………$102,000
Accounts receivable……………………………………………………. 75,000
Raw materials inventory *……………………………………………. 45,600
Totals…………………………………………………………………………$736,000 $736,000
* Raw materials inventory
** Goods in process inventory
Job 402 Job 404 Total
Direct materials……………….. $ 10,200 $18,600 $ 28,800
Part 4
FARINA BAY COMPANY
Income Statement
For Year Ended December 31, 2013
Sales……………………………………………………………………………………$373,000
FARINA BAY COMPANY
Balance Sheet
December 31, 2013
Assets
Cash…………………………………………………………………………… $102,000
Total assets…………………………………………………………………. $448,800
Liabilities and equity
Part 5
This $5,600 error would cause the costs for Job 404 to be understated. Since
Job 404 is in process at the end of the period, goods in process inventory and
Title: Problem 19-3A
QA_Ori:
Part 1
JOB COST SHEETS
Job No. 136
Job No. 138
Materials……………
$ 48,000
Materials……………
$ 19,200
Labor………………..
12,000
Labor………………..
37,500
Overhead…………..
24,000
Overhead…………..
75,000
Total cost
…………..
$ 84,000
Total cost
…………..
$131,700
Job No. 137
Job No. 139
Materials……………
$ 32,000
Materials……………
$ 22,400
Labor………………..
10,500
Labor………………..
39,000
Overhead…………..
21,000
Overhead…………..
78,000
Total cost………….. $ 63,500 Total cost………….. $139,400
Job No. 140
Materials……………
$ 6,400
Labor………………..
3,000
Overhead…………..
6,000
Total cost………….. $ 15,400
Part 2
a. Raw Materials Inventory……………………………………………200,000
b. Factory Payroll………………………………………………………..126,000
c. Factory Overhead…………………………………………………….15,000
d. Goods in Process Inventory………………………………………128,000
e. Goods in Process Inventory………………………………………102,000
f. Goods in Process Inventory………………………………………177,000
g. Finished Goods Inventory…………………………………………355,100
h. Accounts Receivable………………………………………………..525,000
i. Factory Overhead…………………………………………………….149,500
j. Goods in Process Inventory………………………………………27,000
Part 3
GENERAL LEDGER ACCOUNTS
Raw Materials Inventory Factory Payroll
(a) 200,000 (d) 147,500 (b) 126,000 (e) 126,000
Bal. 52,500 Bal. 0
Goods in Process Inventory Factory Overhead
(d) 128,000 (g) 355,100 (c) 15,000 (f) 177,000
Finished Goods Inventory Cost of Goods Sold
Part 4
Reports of Job Costs*
Goods in Process Inventory
Finished Goods Inventory
Cost of Goods Sold
*Individual totals reconcile with account balances in part 3.
Title: Problem 19-4A
QA_Ori:
Part 1
a. Predetermined overhead rate
b. Overhead costs charged to jobs
Direct Applied
Job No. Labor Overhead (60%)
201……………………………………………………………….$ 604,000 $ 362,400
c. Overapplied or underapplied overhead determination
Actual overhead cost………………………………………$1,520,000
Part 2