May 31 Balance 28,280
CHAPTER 20
SOLUTIONS TO EXERCISES—SET B
EXERCISE 20-1B
(a) Factory Labor ……………………………………………………. 77,000
Factory Wages Payable ……………………………….. 61,000
Employer Payroll Taxes Payable ………………….. 9,600
EXERCISE 2-2B
(a) May 31 Work in Process Inventory ………………….. 10,500
Manufacturing Overhead …………………….. 1,800
Raw Materials Inventory…………………. 12,300
31 Finished Goods Inventory …………………… 8,460
Work in Process Inventory
($2,000 + $2,500 + $2,200 + $1,760)* … 8,460
(b)
Work in Process Inventory
May 1 Balance 3,200
31 10,500
May 31 8,460
EXERCISE 20-2B (Continued)
Job Cost Sheets
Job
No.
Beginning Work
in Process
Direct
Material
Direct
Labor
Manufacturing*
Overhead
Total
430
$1,200
$3,600
$ 3,000
$2,400
$10,200
EXERCISE 20-3B
(a) 1. $14,305, or ($4,105 + $6,000 + $4,200).
(b) Jan. 31 Work in Process Inventory ………………….. 8,000
Raw Materials Inventory
($6,000 + $2,000) ……………………….. 8,000
31 Work in Process Inventory ………………….. 12,500
Factory Labor
EXERCISE 20-4B
(a) + $50,000 + $37,500 = $135,650
$213,300 – (c) = $193,200
(c) = $20,100
EXERCISE 20-4B (Continued)
[Note: The instructions indicate that manufacturing overhead is applied on the
basis of direct labor cost, and the rate is the same in all cases. From Case A,
a student should note the overhead rate to be 75%, or ($37,500 ÷ $50,000).]
(d) = .75 X $120,000
(d) = $90,000
[Note: (h) and (i) are solved together.]
(i) = .75(h)
$72,600 + (h) + .75(h) = $212,600
1.75(h) = $140,000
EXERCISE 20-5B
(a) $2.56 per machine hour ($320,000 ÷ 125,000).
(b) ($308,000) – ($2.56 x 130,000 Machine Hours)
$308,000 – $332,800 = $24,800 overapplied
EXERCISE 20-6B
(a) (1) The source documents are:
Direct materials—Materials requisition slips.
(2) The predetermined overhead rate is 140% of direct labor cost. For
example, on July 15, the computation is $560 ÷ $400 = 140%. The
same result is obtained on July 22 and 31.
(3) The total cost is:
(b) July 31 Finished Goods Inventory ………………………. 7,965
EXERCISE 20-7B
1. Raw Materials Inventory ………………………………………… 45,235
Accounts Payable ………………………………………….. 45,235
2. Work in Process Inventory …………………………………….. 29,600
4. Work in Process Inventory …………………………………….. 49,000
Manufacturing Overhead ……………………………………….. 7,900
Factory Labor ………………………………………………… 56,900
EXERCISE 20-7B (Continued)
5. Manufacturing Overhead ………………………………… 80,500
Accounts Payable ……………………………………. 80,500
6. Work in Process Inventory ($49,000 X 120%) ……. 58,800
Manufacturing Overhead………………………….. 58,800
EXERCISE 20-8B
1. Raw Materials Inventory …………………………………. 213,000
Accounts Payable ……………………………………. 213,000
Factory Labor ………………………………………………… 92,000
Factory Wages Payable ……………………………. 92,000
2. Work in Process Inventory ……………………………… 153,530
Manufacturing Overhead ………………………………… 4,800
Raw Materials Inventory …………………………... 158,330
EXERCISE 20-8B (Continued)
5. Work in Process Inventory ……………………………… 59,150
Manufacturing Overhead
(70% X $84,500) …………………………………… 59,150
Computation of cost of jobs finished:
Job
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Total
A20
$33,240
$18,500
$12,950
$ 64,690
EXERCISE 20-9B
(a) ANDRES MANUFACTURING COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended May 31, 2017
Work in process, May 1 …………………………………. $ 18,800
Direct materials used …………………………………….. $54,200
Direct labor …………………………………………………… 32,000
EXERCISE 20-9B (Continued)
(b) ANDRES MANUFACTURING COMPANY
(Partial) Income Statement
For the Month Ended May 31, 2017
Sales…………………………………………………………. $200,000
Cost of goods sold
Finished goods, May 1 ………………………… $ 12,600
Cost of goods manufactured ……………….. 127,100
(c) In the May 31 balance sheet, the manufacturing inventories will be reported in
EXERCISE 20-10B
(a) Work in Process Inventory
April 30 $11,300 (#10, $7,200 + #11, $4,100)
(b) Finished Goods Inventory
April 30 $1,200 (#12)
(c) Gross Profit
Month
Job
Number
Sales
Cost of
Goods Sold
Gross
Profit
EXERCISE 20-11B
(a)
Transaction
Number
Accounts Titles
Debit
Credit
1
Supplies ……………………………………..
1,795
Accounts Payable ……………………
1,795
Work in Process ………………………….
Operating Overhead …………………….
Supplies …………………………………
3
Work in Process ………………………….
41,250
Operating Overhead …………………….
13,750
Salaries Payable ……………………..
55,000
4
Operating Overhead …………………….
30,000
Cash ………………………………………
5
Work in Process ($41,250 X 80%) ….
33,000
Operating Overhead ………………..
33,000
6
Cost of Completed Work ………………
Work in Process ……………………..
(b)
Work in Process
2.
700
68,000
6.
3.
41,250
5.
EXERCISE 20-12B
(a)
Manson
Walker
Barton
Direct materials
$ 650
$ 350
$ 200
Auditor labor costs
5,400
6,600
3,375
Applied overhead
Total cost
(b) The Barton job is the only incomplete job, therefore, $5,375.
(c) Applied overhead
$ 10,500 (CR)
Actual overhead
Balance
$ 500 (CR)
EXERCISE 20-13B
(a) Predetermined overhead rate = Budgeted overhead ÷ Budgeted
decorator hours
(b) Applied overhead
Work in Process (52,000 hrs X $17) …………………
884,000
Operating Overhead ………………………….
884,000
(c)
Applied overhead
$ 884,000
Actual overhead
Balance
$ 5,000
overapplied
SOLUTIONS TO PROBLEMS—SET C
PROBLEM 20-1C
(a) $450,000 ÷ 20,000 direct labor hours = $22.50 per direct labor hour
(b) See solution to part (e) for job cost sheets
(c) Raw Materials Inventory ……………………………………. 46,000
Accounts Payable ……………………………………… 46,000
(d) Work in Process Inventory ………………………………… 33,000
Raw Materials Inventory
($5,000 + $15,000 + $13,000) ……………………. 33,000
Work in Process Inventory ………………………………… 24,900
Factory Labor
PROBLEM 20-1C (Continued)
(e) Job Cost Sheets
Job No. 25
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan.
5,000
Manufacturing overhead ………………………………………. 13,500
Total cost …………………………………………………………………… $37,500
Beg.
$10,000
$6,000
*$ 9,000*
Job No. 26
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan.
$15,000
$15,000
$12,000
$12,000
**$18,000**
**$18,000**
Direct labor …………………………..……………………………… 12,000
Manufacturing overhead ………………………………………. 18,000
Total cost …………………………………………………………………… $45,000
Cost of completed job
Direct materials ……………………………………………………. $15,000
Job No. 27
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan.
$13,000
$9,900
***$14,850***
PROBLEM 20-1C (Continued)
Finished Goods Inventory ………………………………. 82,500
Work in Process Inventory
($37,500 + $45,000) ………………………………. 82,500
(f) Cost of Goods Sold ……………………………………….. 82,500
(g)
Work in Process
Beginning balance
Direct materials
25,000
33,000
82,500
Cost of completed jobs 25 and 26
(h)
Manufacturing Overhead
Actual
40,500
Applied
37,350
PROBLEM 20-2C
(a)
Work in Process Inventory
1/1 Balance (1) 113,000
Direct materials (2) 105,000
Direct labor (3) 141,000
Manufacturing overhead (4)175,000
Completed work (5) (c) 347,000
12/31 Balance 187,000
(1)
Job 50
$ 65,000
(3)
Job 50
$ 37,000
$141,000
(2)
Job 50
Job 51
$ 32,000
30,000
(4)
Job 50
Job 51
$ 45,000
50,000
(5) (a) Job 50
Beginning balance ………………………………………… $ 65,000
(b) Job 51
Beginning balance ………………………………………… $ 48,000
Direct materials …………………………………………….. 30,000
(c) Total cost of completed work
Job 50 ………………………………………………………….. $179,000
PROBLEM 20-2C (Continued)
Work in process balance ………………………………………… $187,000
Unfinished job No. 52 …………………………………………….. $187,000 (a)
(a) Current year’s cost
Direct materials ……………………… $ 43,000
(b) Actual overhead costs
Incurred on account ……………………………………….. $121,000
Indirect materials ……………………………………………. 12,000
Applied overhead costs
Job 50 ……………………………………………………………. $ 45,000
Job 51 ……………………………………………………………. 50,000
Actual overhead ……………………………………………………. $170,500
Applied overhead ………………………………………………….. 175,000
overapplied overhead ……………………………………………. $ 4,500
(c) Sales (given) …………………………………………….. $500,000
Cost of goods sold
Add: Job 48 …………………………………………….. $ 87,000
Job 49 …………………………………………….. 65,000
PROBLEM 20-3C
(a)
(i) Raw Materials Inventory ……………………………………. 4,300
Accounts Payable ………………………………………. 4,300
Factory Labor …………………………………………………… 8,200
Cash ………………………………………………………….. 8,200
Work in Process Inventory ………………………………… 5,600
Manufacturing Overhead …………………………………… 2,000
Factory Labor …………………………………………….. 7,600
(iii) Finished Goods Inventory …………………………………. 21,540
Work in Process Inventory ………………………….. 21,540
Job
Direct
Materials
Direct
Labor
Manufacturing
Overhead*
Total
Costs
Clark
$3,100
$2,500
$2,000
$ 7,600
*80% of direct labor amount
Cash ………………………………………………………………… 45,000
PROBLEM 20-3C (Continued)
(b)
Work in Process Inventory
Overhead applied 4,480
5/1 Balance 13,080
Direct materials 5,500
5/31 Completed work 21,540
(c) Work in Process Inventory ……………………………………………….. $7,120
(d) VICTOR RAMOS COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended May 31, 2017
Work in process, May 1 ……………………………………. $13,080
Direct materials used ……………………………………….. $5,500
Direct labor ……………………………………………………… 5,600
PROBLEM 20-4C
(a) Department A: $825,000 ÷ $550,000 = 150% of direct labor cost.
Department B: $600,000 ÷ 40,000 = $15.00 per direct labor hour.
Department C: $797,500 ÷ 110,000 = $7.25 per machine hour.
(b)
Department
Manufacturing Costs
A
B
C
Total
Direct materials
Direct labor
$ 92,000
52,000
$ 98,000
35,000
$ 64,000
50,400
(c)
Department
Manufacturing Overhead
A
B
C
Under (over) applied
Incurred
$ 76,000
$55,000
$92,000
PROBLEM 20-5C
(a) $89,000 ($78,000 + $11,000).
(b) $20,500 [($17,000 + $92,500) – $89,000 (See (a))].
(h) $153,000 (Given in other data).
(i) $336,700 (Same as (f)).