Question

Analyzing Manufacturing Cost Accounts

Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May:

Materials
May 1	Balance	29,500	May 31	Requisitions	(a)
31	Purchases	118,500

Work in Process
May 1	Balance	(b)	31	Completed jobs	(f)
31	Materials	(c)
31	Direct labor	(d)
31	Factory overhead applied	(e)

Finished Goods
May 1	Balance	0	May 31	Cost of goods sold	(g)
31	Completed jobs	(f)

Wages Payable
			May 31	Wages incurred	121,300

Factory Overhead
May 1	Balance	21,500	May 31	Factory overhead applied	(e)
31	Indirect labor	(h)
31	Indirect materials	15,800
31	Other overhead	107,400

In addition, the following information is available:

1. Materials and direct labor were applied to the following jobs in May:
   

   Job No.		Style	Quantity		Direct Materials				Direct Labor
   101		AF1	220			$20,540				$17,000
   102		AF3	380			30,120				24,000
   103		AF2	230			16,410				9,000
   104		VY1	260			29,380				26,000
   105		VY2	190			21,360				17,000
   106		AF4	140			8,240				4,000
   		Total	1,420			$126,050				$97,000

2. Factory overhead is applied to each job at a rate of 170% of direct labor cost.
3. The May 1 Work in Process balance consisted of two jobs, as follows:
   

   Job No.	Style	Work in Process, May 1
   101	AF1	$6,600
   102	AF3	14,900
   Total		$21,500

4. Customer jobs completed and units sold in May were as follows:
   

   Job No.	Style	Completed in May	Units Sold in May
   101	AF1	X	176
   102	AF3	X	304
   103	AF2		0
   104	VY1	X	218
   105	VY2	X	158
   106	AF4		0

Required:

1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers.

Job No.

Quantity

May 1 Work in Process

Direct Materials

Direct Labor

Factory Overhead

Total Cost

Unit Cost

Units Sold

Cost of Goods Sold

No. 101

/

$ 6,600

$ 20,540

$ 17,000

$?

$?

$?

?

$?

No. 102

?

14,900

30,120

24,000

?

?

?

?

?

No. 103

?

16,410

9,000

?

?

?

?

?

No. 104

?

29,380

26,000

?

?

?

?

?

No. 105

?

21,360

17,000

?

?

?

?

?

No. 106

?

8,240

4,000

?

?

?

?

Total

?

$21,500

$126,050

$97,000

$?

$?

$?

a. Materials Requisitions $ ?

b. Work in Process Beginning Balance $ ?

c. Direct Materials $ ?

d. Direct Labor $ ?

e. Factory overhead applied $?

f. Completed jobs $?

g. Cost of goods sold $ ?

h. Indirect labor $ ?

2. Determine the May 31 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.

Materials	$ ?
Work in Process	$ ?
Finished Goods	$ ?
Factory Overhead	$ ?

Answer 1

Job No.	Quantity	July 1 work in Process	Direct Material	Direct Labor	Factory Overhead	Total			Cost of Goods Sold
							Units	Units
							Cost	Sold
101	220	6600	20540	17000	28900	73040	332	176	58432
102	380	14900	30120	24000	40800	109820	289	304	87856
103	230		16410	9000	15300	40710		0	-
104	260		29380	26000	44200	99580	383	218	83494
105	190		21360	17000	28900	67260	354	158	55932
106	140		8240	4000	6800	19040		0	-
Total	1420	21500	126050	97000	164900				285714

a). Materials Requisitions = Total Direct Material + Indirect Material

                                          = 126050+ 15800

                                    = $ 141850

b). Work in Process Beginning Balance =   $21500 (from Table)

c). Direct Materials = $126050

d). Direct Labor = $ 97000

e). Factory Overhead Applied = $ 164900

f). Completed Jobs = 70340 ( Job 101) + 109820 (Job 102)

                             + 99580 (Job 104) + 67260 (Job 105)

                            = $ 347000

g). Cost of Goods Sold = $ 285714

h). Indirect Labor = 121300 (Wages Incurred) - 97000   (Direct Labor) = $ 24,300

2. Determine the May 31 balances for each of the inventory accounts and factory overheads as follow

Material = 29500 (Opening Balance) +118500 (Purchases) + 141850(Material Requisition) = $ 289850

Work in Process = 40710 (Job 103)+ 19040 (Job 106) = $ 59750

Finished Goods = $ 347000 (Completed Jobs) – 285714 (Cost of Goods Sold) = $ 61286

Factory Over haed = 6600 (Opening Balance) +15800(Indirect Material)+ 107400(Other Over Head)+ 24300(Indirect Labor) – 164900(Factory Over head Applied) = $10800