Question : 152. Six selected transactions for the current month indicated by letters : 1234312

 

152. Six selected transactions for the current month are indicated by letters in the following T accounts in a job order cost accounting system: 

Materials

 

Work in Process

 

(a)

 

(a)

(d)

 

 

 

(b)

 

 

 

 

(c)

 

Wages Payable

 

(f)

 

 

(b)

 

 

 

 

 

 

 

 

Factory Overhead

 

Finished Goods

(a)

(c)

 

(d)

(e)

(b)

(f)

 

(f)

 

 

 

 

 

 

Cost of Goods Sold

 

 

 

(e)

 

 

 

 

(f)

 

 

 

 

 

 

 

 

 

Describe each of the six transactions. 

153. On January 2nd, Paper Punchers Manufacturing purchases 5 rolls of paper on account at $125.00 per roll for use within the production process. On January 5th 3 rolls of this paper are issued to Job 010507A in the Printing Department. The Printing Department records $575.00 in direct labor and $1,150.00 of factory overhead to Job 010507A. On January 8th Printing transfers Job 010507A to the Folding Department. The folding department applies $450.00 in direct labor and $655.00 in factory overhead to Job 010507A. Job 010507A is transferred to Finished Goods Inventory on January 9th. 

(a)Journalize the purchasing of the paper to Raw Materials Inventory.

(b)Journalize the transfer of raw materials to work in process, the application of direct labor, and the application of manufacturing overhead to Job 010507A while in the Printing Department.

(c)Journalize the transfer of Job 010507A to the Folding Department at actual cost.

(d)Journalize the application of direct labor, and the application of manufacturing overhead to Job 010507A while in the Folding Department.

(e)Journalize the transfer of Job 010507A to Finished Goods Inventory at actual cost.

154. The Stamping Department accepted Job 051507A on May 15th to make 1,000 funnels. To complete the job they drew 1,100 sheets at $1.10 per sheet and 1,150 grommets at $0.15 per set. The driver that the Stamping Department uses is drop-forge strokes which are counted on a machine mounted counter. $375.00 is applied to each job as overhead due to setup and teardown and $2.25 is applied as overhead for each drop-forge stroke. Direct labor is applied at $22.50 per hour for the machine operator and $11.10 for the machine loader. The job required 6 1/2 hours of labor by the team. When the job was complete Job 051507A was transferred to SFGI (Semi-finished Goods Inventory). When the job was transferred, 20 sheets were returned unused to raw material inventory, 75 grommet sets were returned, and there were 1,115 strokes on the counter. Journalize all events depicted as of May 15th. 

First, “load” the job with raw materials”

May 15th     WIP – Job 051507A1,382.50 ($1,210.00 + $172.50)

 Raw Material Inventory1,382.50

May 15th     WIP – Job 051507A375.00  (Mfg overhead for setup)

 WIP – Job 051507A2,508.75  (Mfg overhead for strokes)

  Mfg Overhead2,883.75

155. On November 14th the Milling Department has accepted Job 111407A for 1,000 pounds of Cereal Mix. The bill of materials (BOM) for the Cereal Mix is:

 Material:Standard Qty:Standard Cost:

 Oats525 pounds$1.25 per pound

 Wheat450 pounds$1.15 per pound

 Barley85 pounds$1.45 per pound

 Malt65 pounds$2.15 per pound

 Honey25 quarts$1.20 per quart

 Water25 gallons$0.45 per gallon

 Time:  

 Miller4 1/2 hours$22.75 per hour

 Loader1 1/2 hours$11.50 per hour

Manufacturing overhead is applied at $5.75 per pound completed, and $75 of materials are returned to Raw Materials Inventory. The recipe produced 1,025 pounds of cereal mix. 

(a)Write the journal entry to “load” (furnish raw materials) to Job 111407A.

(b)Write the journal entry to provide labor to Job 111407A.

(c)Write the journal entry to return 50 pounds oats, 5 pounds of barley, and 5 quarts of honey back to raw materials inventory.

(d)Write the journal entry to apply manufacturing overhead to Job 111407A.

(e)Transfer Job 111407A to finished goods on November 14th.

156. Put the following in the order of the flow of manufacturing costs for a companya. Closing under/over applied factory overhead to cost of goods soldb. Materials purchasedc. Factory labor used and factory overhead incurred in productiond. Completed jobs moved to finished goodse. Factory overhead applied to jobs according to the predetermined overhead ratef. Materials requisitioned to jobsg. Selling of finished producth. Preparation of financial statements to determine gross profit 

157. The following is a list of costs incurred by several business organizations: 

(a)Telephone cable for a telephone company.

(b)Subscription to a health club for executives.

(c)Salary of the Director of Internal Auditing.

(d)Long-distance telephone bill for calls made by salespersons.

(e)Carrying cases for a manufacturer of video camcorders.

(f)Cotton for a textile manufacturer of blue jeans.

(g)Bandages for the emergency room of a hospital.

(h)Cost of company holiday party.

(i)Electricity used to operate factory machinery.

(j)State unemployment compensation taxes for factory workers.

(k)Gloves for factory machine operators.

(l)Fees paid lawn service for office grounds.

(m)Salary of secretary to vice-president of finance.

(n)Salary of secretary to vice-president of marketing.

(o)Production supervisor’s salary.

(p)Engine oil for manufacturer and distributor of motorcycles.

(q)Oil lubricants for factory plant and equipment.

(r)Cost of a radio commercial.

(s)Depreciation on factory equipment.

(t)Wages of check-out clerk in company-owned retail outlet.

(u)Maintenance and repair costs for factory equipment.

(v)Depreciation on office equipment.

(w)Bonuses paid to salespersons.

(x)Insurance on factory building.

(y)Training for accounting personnel on use of microcomputer.

(z)Steel for a construction contractor.

Classify each of the preceding costs as product costs or period costs. For those costs classified as product costs, indicate whether the product cost is a direct materials cost, direct labor cost, or factory overhead cost. For those costs classified as period costs, indicate whether the period cost is a selling expense or an administrative expense. Use the following tabular headings for preparing your answer. Place an X in the appropriate column. 

 

Product Cost

 

Period Cost

Cost

DirectMaterialsCost

DirectLaborCost

FactoryOverheadCost

 

SellingExpense

AdministrativeExpense

 

 

 

 

 

 

 

 

158. List the accounts used in the cost flow for (a) a manufacturer and (b) a service provider.