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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
