1119
Exercise 19-18 (35 minutes)
1. Estimated cost of the architectural job
Labor type
Estimated
hours
Hourly rate
Total cost
2. Frey should first determine an estimated selling price, based on its cost
and desired profit for this job.
This $293,125 price may or may not be its bid. It must consider past
experiences and competition. It might make the bid at the low end of
what it believes the competition will bid. By bidding at about $285,000,
the profit on the job will only be $71,875 ($285,000 – $213,125). While
this may allow Frey to get the job, it must consider several other factors.
Among them:
Exercise 19-19 (15 minutes)
(1)
9,900
9,900
(2)
14,850
Exercise 19-20 (15 minutes)
(1)
3,108
3,108
3,106
3,106
(2) The amount of materials purchased is almost equal to the amount of
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 19
1121
PROBLEM SET A
Problem 19-1A (80 minutes)
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
Part 2 Journal entries for April
a.
Raw Materials Inventory …………………………………………
500,000
500,000
455,000
455,000
Work in Process Inventory …………………………..…………
e.
170,000
170,000
Direct materials ………………….
1122
Problem 19-1A (continued)
f.
Factory Overhead …………………………………………………..
[continued from prior page]
Factory Overhead …………………………………………………..
50,000
g.
Finished Goods Inventory (306 & 307) ……………………..
828,500
1123
Problem 19-1A (Continued)
Part 3
MARCELINO COMPANY
Schedule of Cost of Goods Manufactured
For Month Ended April 30
Direct materials used ……………………………………………………….
$ 455,000
Direct labor used ……………………………………………………………….
Factory overhead applied …………………………………………………..
Total manufacturing costs …………………………………………………
Add work in process March 31 (Jobs 306 & 307) …………………
Total cost of work in process ……………………………………………..
Deduct work in process, April 30 (Job 308) …………………………
Part 4
Gross profit on the income statement for the month ended April 30
Sales …………………………………………………………………………………………….
$ 635,000
Cost of goods sold ($321,500 + $5,000) …………………………………………..
Inventories
Raw materials ………………………………………………………………………………
$ 75,000*
Work in process (Job 308) ……………………………………………………………..
Finished goods (Job 307) ………………………………………………………………
1124
Problem 19-2A (75 minutes)
Part 1
a.
Dec. 31
Work in Process Inventory ……………………………………..
28,800
b.
Dec. 31
Work in Process Inventory ……………………………………..
59,800
c.
Dec. 31
Work 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
Additional indirect materials ………………………………………………
debit
Underapplied overhead ……………………………………………………..
$ 9,200
debit
Dec. 31
9,200
1125
Problem 19-2A (continued)
Part 3
BERGAMO BAY COMPANY
Trial Balance
December 31, 2017
Debit
Credit
Cash ………………………………………………………………………..
$170,000
* Raw materials inventory
$80,000
Direct materials ……………..
Direct labor ……………………
Overhead ………………………
1126
Problem 19-2A (continued)
Part 4
BERGAMO BAY COMPANY
Income Statement
For Year Ended December 31, 2017
Sales ……………………………………………………………………………………
$373,000
BERGAMO BAY COMPANY
Balance Sheet
December 31, 2017
Assets
Cash …………………………………………………………………………..
$170,000
Problem 19-2A (concluded)
Part 5
This $5,600 error would cause the costs for Job 404 to be understated.
b.
128,000
Problem 19-3A (70 minutes)
Part 1
JOB COST SHEETS
Job No. 136
Job No. 138
Materials …………..
$ 48,000
Materials …………..
$ 19,200
Job No. 137
Job No. 139
Materials …………..
$ 32,000
Materials …………..
$ 22,400
Job No. 140
Materials …………..
Part 2
a.
Raw Materials Inventory …………………………………………
200,000
1129
Problem 19-3A (Continued)
[continued from prior page]
d.
Work in Process Inventory ……………………………………..
102,000
Factory Overhead …………………………………………………..
e.
Work in Process Inventory ……………………………………..
177,000
f.
Finished Goods Inventory ………………………………………
355,100
g.
Accounts Receivable ……………………………………………..
525,000
215,700
h.
Factory Overhead …………………………………………………..
149,500
i.
Work in Process Inventory ……………………………………..
1130
Problem 19-3A (Continued)
Part 3
GENERAL LEDGER ACCOUNTS
Raw Materials Inventory
(a)
200,000
(b)
147,500
Bal.
128,000
(f)
102,000
Part 4
Reports of Job Costs*
Work in Process Inventory
Job 137 ………………………………….
$ 63,500
Job 140 ………………………………….
Balance ………………………………….
Job 139 ………………………………….
Job 136 ………………………………….
Job 138 ………………………………….
1131
Problem 19-4A (35 minutes)
Part 1
a. Predetermined overhead rate
b. Overhead costs charged to jobs
Direct
Applied
Job No.
Labor
Overhead (60%)
201 ……………………………………………………………….
$ 604,000
$ 362,400
202 ……………………………………………………………….
203 ……………………………………………………………….
204 ……………………………………………………………….
205 ……………………………………………………………….
206 ……………………………………………………………….
Less applied overhead cost …………………………..
Underapplied overhead …………………………..
$ 12,800
Problem 19-5A (80 minutes)
JOB COST SHEET
Customer’s Name
Worldwide Company
Job No.
102
Direct Materials
Direct Labor
Overhead Costs Applied
Date
Requisition
Number
Amount
Time
Ticket
Number
Amount
Date
Rate
Amount
#35
33,750
#1–10
90,000
May —
80%
72,000
#36
12,960
46,710
90,000
JOB COST SHEET
Customer’s Name
Reuben Company
Job No.
#37
17,500
65,000
May —
80%
52,000
#38
1133
Problem 19-5A (Continued)
MATERIALS LEDGER CARD
Item
Material M
Received
Issued
Balance
Date
Receiving
Report
Units
Unit
Price
Total
Price
Requi–
sition
Units
Unit
Price
Total
Price
Units
Unit
Price
Total
Price
MATERIALS LEDGER CARD
Item
Material R
Received
Issued
Balance
Date
Receiving
Report
Units
Unit
Price
Total
Price
Requi–
sition
Units
Unit
Price
Total
Price
Units
Unit
Price
Total
Price
MATERIALS LEDGER CARD
Item
Paint
Received
Issued
Balance
Date
Receiving
Report
Units
Unit
Price
Total
Price
Requi–
sition
Units
Unit
Price
Total
Price
Units
Unit
Price
Total
Price
1134
Problem 19-5A (Continued)
GENERAL JOURNAL
Raw Materials Inventory ………………………………………..
d.
155,000
102,000
208,710
f.
Accounts Receivable …………………………………………….
400,000
208,710
i.
124,000
Problem 19-5A (Continued)
j. The ending balance in the Factory Overhead account is computed as:
Actual Factory Overhead
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 19
PROBLEM SET B
Problem 19-1B (80 minutes)
Part 1
Total manufacturing costs and the costs assigned to each job
114
115
116
Sept. Total
From August
Direct materials …………………………..
$ 14,000
$ 18,000
18,000
Direct materials …………………………..
30,000
Part 2 Journal entries for September
Raw Materials Inventory …………………………………………
1137
Problem 19-1B (Continued)
f. [continued from prior page]
Factory Overhead …………………………………………………..
20,000
Factory Overhead …………………………………………………..
Factory Overhead …………………………………………………..
Factory Overhead …………………………………………………..
g.
Finished Goods Inventory ………………………………………
500,000
500,000
h.
Cost of Goods Sold ………………………………………………..
186,000
186,000
i.
380,000
380,000
j.
Factory Overhead* …………………………..…………………….
1138
Problem 19-1B (Continued)
Part 3
PEREZ MFG.
Schedule of Cost of Goods Manufactured
For Month Ended September 30
Part 4
Gross profit on the income statement for the month ended September 30
Presentation of inventories on the September 30 balance sheet
Inventories