Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 15
Problem 15-6A (30 minutes)
1.
JOB COST SHEET
Customer’s Name
Woz Company
Job No.
102
Direct Labor
Overhead
Date
Requisition
Number
Cost
Time
Ticket
Number
Cost
Date
Rate
Cost
#35
$33,750
#1–10
$90,000
May —
80%
$72,000
#36
$46,710
$90,000
JOB COST SHEET
Customer’s Name
Reuben Company
Job No.
103
Direct Labor
Overhead
Date
Requisition
Number
Cost
Time
Ticket
Number
Cost
Date
Rate
Cost
#37
$17,500
#11–30
$65,000
May —
80%
$52,000
#38
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Problem 15-6A (Continued)
MATERIALS LEDGER CARD
Item
Cinder blocks
Received
Issued
Balance
Date
Receiving
Report
Units
Unit
Price
Total
Price
Requi–
sition
Units
Unit
Price
Total
Price
Units
Unit
Price
Total
Price
May 1
200
250
$50,000
$250
450
250
112,500
$250
315
250
250
245
250
MATERIALS LEDGER CARD
Item
Boulders
Received
Issued
Balance
Date
Receiving
Report
Units
Unit
Price
Total
Price
Requi–
sition
Units
Unit
Price
Total
Price
Units
Unit
Price
Total
Price
May 1
95
$180
$17,100
185
180
180
113
180
180
75
180
MATERIALS LEDGER CARD
Item
Stain
Received
Issued
Balance
Date
Receiving
Report
Units
Unit
Price
Total
Price
Requi–
sition
Units
Unit
Price
Total
Price
Units
Unit
Price
Total
Price
May 1
55
75
$4,125
40
75
977
Problem 15-6A (concluded)
2.
Sales ……………………………………………………
$400,000
3.
Raw Materials Inventory* ………………………
$ 77,750
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 15
978
PROBLEM SET B
Problem 15–1B (25 minutes)
1. Total cost of direct materials requisitioned in May equals the total direct
materials costs accumulated on the three jobs less the amount of direct
Job 8 ……………………………………………………..
$25,000
Job 9 ……………………………………………………..
Job 10 ……………………………………………………
2. Total cost of direct labor used in May equals the total direct labor costs
accumulated on the three jobs less the amount of direct labor cost
assigned to Job 8 in April.
Job 8 ……………………………………………………..
$10,000
Job 9 ……………………………………………………..
Job 10 ……………………………………………………
3. Predetermined overhead rate equals the ratio of the amount of overhead
applied to jobs divided by the amount of direct labor cost assigned to
Overhead ………………………….
Direct labor ………………………
4. Total cost transferred to Finished Goods Inventory in May equals the total
costs of the two completed jobs (Jobs 8 and 9) for May.
Job 8
Job 9
Total
Direct materials ………………….
$25,000
$23,240
$48,240
Direct labor ………………………..
Overhead …………………………...
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Problem 15-2B (75 minutes)
Part 1 Overhead applied to each job in April (50% of direct labor cost)
Job 114
Job 115
Job 116
Sept. Total
Direct labor ………………
$30,000
$68,000
$120,000
$218,000
Overhead applied* ……..
$15,000
$34,000
$ 60,000
$109,000
Part 2 Total manufacturing costs and the costs assigned to each job
Job 114
Job 115
Job 116
Sept. Total
August
Direct materials ………………..
$ 14,000
$ 18,000
—
—
Direct labor ………………………
18,000
16,000
—
—
Overhead applied* …………….
—
—
41,000
42,000
—
September
Direct materials ………………..
170,000
Direct labor ……………………..
30,000
68,000
120,000
Overhead applied* …………….
Total costs added Sept. …….
Part 3 Journal entries for September
a.
Raw Materials Inventory ……………………………….
400,000
Accounts Payable ……………………………………
400,000
Record materials purchases.
350,000
Raw Materials Inventory ………………………….
350,000
c.
Work in Process Inventory …………………………...
Record and pay direct labor.
Raw Materials Inventory ………………………….
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 15
980
Problem 15-2B (continued)
e.
Factory Overhead …………………………………………
14,000
Cash ……………………………………………………….
14,000
Record and pay indirect labor.
109,000
Factory Overhead ……………………………………
109,000
Apply overhead to jobs.
g.
Factory Overhead …………………………………………
62,000
Cash ……………………………………………………….
32,000
Accum. Depreciation—Factory Equip ………
30,000
h.
Finished Goods Inventory …………………………….
500,000
Work in Process Inventory ………………………
500,000
Record jobs completed ($186,000 + $314,000).
186,000
Finished Goods Inventory ……………………….
186,000
Record cost of sale of job.
j.
380,000
Sales ………………………………………………………
380,000
Record sale of job.
k.
Factory Overhead* ………………………………………..
3,000
Cost of Goods Sold ………………………………….
3,000
Close overapplied overhead.
Overhead incurred
Indirect materials …………………………………..
$30,000
Factory rent …………………………………………..
Factory utilities ……………………………………..
Factory equip. depreciation ……………………
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Problem 15-2B (continued)
Part 4
PEREZ COMPANY
Schedule of Cost of Goods Manufactured
For Month Ended September 30
Direct materials used …………………………………………………………..
$350,000
Direct labor …………………………………………………………………………
218,000
Total manufacturing costs …………………………………………………..
Total cost of work in process ……………………………………………….
Part 5
Gross profit on income statement for month ended September 30
Sales …………………………………………………………………………………….
$380,000
Cost of goods sold ($186,000 – $3,000) …………………………………..
(183,000)
Gross profit …………………………………………………………………………
$197,000
Reporting of inventories on September 30 balance sheet
Inventories
Raw materials ……………………………………………………….……………
$170,000*
Work in process (Job 116) …………………………………………………..
Finished goods (Job 115) ……………………………………………………
$744,000
Part 6
Overhead is overapplied by $3,000, meaning that individual jobs or job lots
are over-costed. Thus, gross profit at the job level is understated.
Problem 15-3B (75 minutes)
Part 1
a.
Dec. 31
Work in Process Inventory ……………………….
12,200
Raw Materials Inventory ……………………..
12,200
Record direct materials costs for
Jobs 603 and 604 ($4,600 + $7,600).
b.
Dec. 31
Work in Process Inventory ……………………….
13,000
Factory Wages Payable ………………………
13,000
Record direct labor costs for
c.
Dec. 31
Work in Process Inventory ……………………….
26,000
Factory Overhead ……………………………….
26,000
Apply overhead to Jobs 603 and 604 at
200% of direct labor cost assigned to them.
d.
Dec. 31
2,100
Raw Materials Inventory ……………………..
e.
Dec. 31
3,000
Factory Wages Payable ………………………
Part 2
Factory Overhead
Actual overhead (given)
27,000
26,000
Applied overhead to Jobs 603, 604
Added Indirect materials
Dec. 31
Cost of Goods Sold ………………………………….
6,100
Factory Overhead ……………………………….
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Problem 15-3B (Continued)
Part 3
CAVALLO MFG.
List of Account Balances
December 31
Debit
Credit
Cash ………………………………………………………………….
$ 64,000
Accounts receivable ………………………………………….
42,000
Raw materials inventory* ……………………………………
11,700
51,200
Accounts payable ………………………………………………
16,000
Notes payable …………………………………………………..
13,500
Common stock ………………………………………………….
30,000
Retained earnings (prior year) …………………………...
87,000
Sales …………………………………………………………………
180,000
Cost of goods sold*** …………………………………………
111,100
Factory overhead ………………………………………………
0
General and administrative expenses …………………
* Raw materials inventory
Balance per trial balance ………………………………………..
$26,000
Less: Direct materials used for Jobs 603 and 604 ……
(12,200)
Less: Indirect materials used …………………………………
(2,100)
Ending balance ………………………………………………………
$11,700
** Work in process inventory
Job 603
Job 604
Total
Direct materials …………..
$ 4,600
$ 7,600
$12,200
Direct labor …………………
Overhead …………………….
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 15
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Problem 15-3B (Continued)
Part 4
CAVALLO MFG.
Income Statement
For Year Ended December 31
Sales ……………………………………………………………………
$ 180,000
Cost of goods sold ……………………………………………….
(111,100)
Gross profit ………………………………………………………….
CAVALLO MFG.
Balance Sheet
December 31
Assets
Cash ……………………………………………………….
$ 64,000
Accounts receivable ……………………………….
42,000
Raw materials inventory …………………………
Work in process inventory ……………………..
Finished goods inventory ……………………….
9,000
71,900
3,000
Liabilities
Accounts payable ……………………………………
$ 10,500
Factory wages payable …………………………...
16,000
Notes payable …………………………………………
13,500
Total liabilities ………………………………………..
40,000
Equity
Common stock ……………………………………….
30,000
Retained earnings ($87,000 + $23,900) ………….
110,900
Total equity …………………………………………….
140,900
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 15
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Problem 15-3B (Concluded)
Part 5
The $2,100 error would cause the costs for Job 604 to be understated.
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 15
Problem 15-4B (70 minutes)
Part 1
JOB COST SHEETS
Job No. 487
Materials ……
$30,000
Overhead …..
Total cost ….
Job No. 488
Materials ……
$20,000
Overhead …..
Total cost ….
$41,000
Job No. 489
Materials ……
$12,000
Overhead …..
Total cost ….
$87,000
Overhead …..
Total cost ….
$92,000
Job No. 491
Materials ……
$ 4,000
Overhead …..
Total cost ….
$10,000
Part 2
a.
Raw Materials Inventory ……………………………….
125,000
Accounts Payable …………………………………..
125,000
Record materials purchases.
Raw Materials Inventory …………………………..
Job No. 490
Materials ……
$14,000
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 15
Problem 15-4B (Continued)
Part 2
c.
Work in Process Inventory …………………………..
68,000
Cash …………………………..…………………………...
68,000
16,000
Cash …………………………..…………………………...
16,000
Record indirect labor.
d.
Work in Process Inventory …………………………...
118,000
Factory Overhead …………………………………….
118,000
Apply overhead to jobs.
($8,000 + $25,000 + $26,000) x 200%
e.
233,000
Work in Process Inventory ……………………….
233,000
f.
Accounts Receivable ……………………………………
340,000
Sales ………………………………………………………
340,000
Record sales on account.
g.
141,000
Finished Goods Inventory ……………………….
141,000
Record cost of sales ($54,000 + $87,000).
h.
96,000
Accum. Depreciation—Factory Building ….
Accum. Depreciation—Factory Equipment.
Prepaid Insurance …………………………………..
Property Taxes Payable ………………………….
i.
Work in Process Inventory …………………………...
18,000
Factory Overhead ……………………………………