Question

[The following information applies to the questions displayed below.]
  

Winfrey Co.'s March 31 inventory of raw materials is $150,000. Raw materials purchases in April are $400,000, and factory payroll cost in April is $220,000. Overhead costs incurred in April are: indirect materials, $30,000; indirect labor, $14,000; factory rent, $20,000; factory utilities, $12,000; and factory equipment depreciation, $30,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $380,000 cash in April. Costs of the three jobs worked on in April follow.

  

	Job 306				Job 307				Job 308
Balances on March 31
Direct materials		$	14,000			$	18,000
Direct labor			18,000				16,000
Applied overhead			9,000				8,000
Costs during April
Direct materials			100,000				170,000			$	80,000
Direct labor			30,000				56,000				120,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

15.

value:
10.00 points

Required information

Required:
1.	Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31). (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

	306	307	308	April Total
Beginning goods in process     (From March)	$	$	$	$
For April
Direct materials
Direct labor
Applied overhead
Total costs added in April
Total costs	$	$	$	$

References

WorksheetLearning Objective: 19-P1 Describe and record the flow of materials costs in job order cost accounting.Learning Objective: 19-P4 Determine adjustments for overapplied and underapplied factory overhead.

Difficulty: 3 HardLearning Objective: 19-P2 Describe and record the flow of labor costs in job order cost accounting.

Learning Objective: 19-C2 Explain job cost sheets and how they are used in job order cost accounting.Learning Objective: 19-P3 Describe and record the flow of overhead costs in job order cost accounting.

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16.

value:
10.00 points

Required information

a.	Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.)
b.	Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory.
c.	Transfer of Jobs 306 and 307 to the Finished Goods Inventory.
d.	Cost of goods sold for Job 306.
e.	Revenue from the sale of Job 306.
f.	Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

2.	Prepare journal entries for the month of April to record the above transactions. (Omit the "$" sign in your response.)

  

	General Journal	Debit	Credit
a.	To record materials purchases.
	(Click to select)Accounts receivableFactory overheadGoods in process inventoryFactory payrollSalesAccounts payableCashRaw materials inventory
	(Click to select)Factory payrollAccounts payableCashRaw materials inventorySalesFactory overheadGoods in process inventoryAccounts receivable
	To record factory payroll.
	(Click to select)Goods in process inventoryFactory overheadAccumulated depreciationPrepaid factory payrollCashSalesFinished goods inventoryFactory payroll
	(Click to select)Prepaid factory payrollFactory overheadAccumulated depreciationCashFactory payrollGoods in process inventoryFinished goods inventorySales
	To record indirect materials.
	(Click to select)Factory overheadFinished goods inventoryCost of goods soldFactory payrollRaw materials inventoryAccumulated depreciationSalesCash
	(Click to select)Finished goods inventoryFactory payrollCashSalesFactory overheadAccumulated depreciationRaw materials inventoryCost of goods sold
	To record indirect labor.
	(Click to select)Raw materials inventoryAccumulated depreciationFactory payrollFactory overheadCashSalesFinished goods inventoryAccounts payable
	(Click to select)Raw materials inventoryAccumulated depreciationSalesAccounts PayableFactory overheadFinished goods inventoryFactory payrollCash
	To record factory rent.
	(Click to select)Accumulated depreciationFactory overheadFactory payrollFinished goods inventoryRaw materials inventoryGoods in process inventoryCashCost of goods sold
	(Click to select)Cost of goods soldFactory overheadRaw materials inventoryCashFactory payrollGoods in process inventoryFinished goods inventoryAccumulated depreciation
	To record factory utilities.
	(Click to select)Raw materials inventoryAccumulated depreciationAccounts payableFactory overheadCost of goods soldFinished goods inventorySalesCash
	(Click to select)Factory overheadCashAccumulated depreciationSalesRaw materials inventoryAccounts payableFinished goods inventoryCost of goods sold
	To record other factory overhead.
	(Click to select)Factory overheadAccumulated depreciation—Factory equipmentFinished goods inventoryRaw materials inventoryFactory payrollSalesCashCost of goods sold
	(Click to select)Raw materials inventoryFactory payrollCost of goods soldSalesCashAccumulated depreciation-Factory equipmentFactory overheadFinished goods inventory
b.	To assign direct materials to jobs.
	(Click to select)Factory overheadFinished goods inventoryCashAccumulated depreciationGoods in process inventorySalesRaw materials inventoryFactory payroll
	(Click to select)Factory payrollRaw materials inventoryFinished goods inventoryGoods in process inventorySalesFactory overheadAccumulated depreciationCash
	To assign direct labor to jobs.
	(Click to select)Factory overheadRaw materials inventoryFactory payrollCashCost of goods soldSalesGoods in process inventoryFinished goods inventory
	(Click to select)Factory payrollGoods in process inventoryCashFinished goods inventoryRaw materials inventoryFactory overheadSalesCost of goods sold
	To apply overhead to jobs.
	(Click to select)Goods in process inventoryCost of goods soldSalesAccumulated depreciationFactory overheadFinished in goods inventoryFactory payrollCash
	(Click to select)Cost of goods soldSalesFinished in goods inventoryFactory payrollAccumulated depreciationFactory overheadGoods in process inventoryCash
c.	To record jobs completed.
	(Click to select)Factory overheadCost of goods soldAccumulated depreciationFinished goods inventoryFactory payrollGoods in process inventoryCashRaw materials inventory
	(Click to select)Finished goods inventoryGoods in process inventoryCost of goods soldAccumulated depreciationRaw materials inventoryFactory overheadCashFactory payroll
d.	To record cost of sale of job.
	(Click to select)Factory payrollSalesCost of goods soldGoods in process inventoryFinished goods inventoryFactory overheadAccumulated depreciationCash
	(Click to select)Cost of goods soldAccumulated depreciationCashGoods in process inventorySalesFinished goods inventoryFactory overheadFactory payroll
e.	To record sale of job.
	(Click to select)Cost of goods soldAccumulated depreciationFactory payrollGoods in process inventorySalesFactory overheadCashFinished goods inventory
	(Click to select)SalesFinished goods inventoryAccumulated depreciationCashFactory payrollGoods in process inventoryFactory overheadCost of goods sold
f.	To assign Over/Underapplied overhead.
	(Click to select)SalesCashFinished goods inventoryAccumulated depreciationGoods in process inventoryFactory overheadFactory payrollCost of goods sold
	(Click to select)CashGoods in process inventoryAccumulated depreciationFinished goods inventoryFactory payrollSalesFactory overheadCost of goods sold

References

WorksheetLearning Objective: 19-P1 Describe and record the flow of materials costs in job order cost accounting.Learning Objective: 19-P4 Determine adjustments for overapplied and underapplied factory overhead.

Difficulty: 3 HardLearning Objective: 19-P2 Describe and record the flow of labor costs in job order cost accounting.

Learning Objective: 19-C2 Explain job cost sheets and how they are used in job order cost accounting.Learning Objective: 19-P3 Describe and record the flow of overhead costs in job order cost accounting.

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17.

value:
10.00 points

Required information

3.	Prepare a manufacturing statement for April (use a single line presentation for direct materials and show the details of overhead cost). (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

    

WINFREY COMPANY Manufacturing Statement For Month Ended April 30
(Click to select)Factory utilitiesFactory rentIndirect laborFactory overheadIndirect materialsCost of goods manufacturedDirect materials used		$
(Click to select)Direct labor usedFactory overheadFactory utilitiesIndirect materialsCost of goods manufacturedFactory rentIndirect labor
Factory overhead
(Click to select)Direct materials usedIndirect materialsDepreciation of equipmentIndirect laborDirect labor usedFactory rentFactory utilities	$
(Click to select)Indirect laborIndirect materialsFactory utilitiesDepreciation of equipmentFactory rentDirect labor usedDirect materials used
(Click to select)Depreciation of equipmentIndirect laborDirect labor usedIndirect materialsDirect materials usedFactory rentFactory utilities
(Click to select)Depreciation of equipmentDirect labor usedFactory rentDirect materials usedIndirect laborIndirect materialsFactory utilities
(Click to select)Direct labor usedDirect materials usedFactory utilitiesDepreciation of equipmentFactory rentIndirect materialsIndirect labor
Total manufacturing costs
(Click to select)Indirect laborDirect materials usedCost of goods manufacturedFactory overheadAdd: Goods in process, March 31Direct labor usedLess: Goods in process, March 31
Total cost of goods in process
(Click to select)Direct materials usedDeduct: Goods in process, April 30Direct labor usedFactory overheadAdd: Goods in process, April 30Depreciation of equipmentFactory rent
(Click to select)Add: Overapplied overheadDeduct: Underapplied overhead
Cost of goods manufactured		$

References

WorksheetLearning Objective: 19-P1 Describe and record the flow of materials costs in job order cost accounting.Learning Objective: 19-P4 Determine adjustments for overapplied and underapplied factory overhead.

Difficulty: 3 HardLearning Objective: 19-P2 Describe and record the flow of labor costs in job order cost accounting.

Learning Objective: 19-C2 Explain job cost sheets and how they are used in job order cost accounting.Learning Objective: 19-P3 Describe and record the flow of overhead costs in job order cost accounting.

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18.

value:
10.00 points

Required information

4.1	Compute gross profit for April. (Omit the "$" sign in your response.)

  

Gross profit

$

  

4.2	Show how to present the inventories on the April 30 statement of financial position. (Omit the "$" sign in your response.)

  

Inventories
Raw materials	$
Goods in process (Job 308)
Finished goods (Job 307)
Total inventories	$

Answer 1

Solution 1:

Computation of production cost incurred in april and total cost assigned to each job
Particulars	Job 306	Job 307	Job 308	Total
From March:
Direct material	$14,000.00	$18,000.00	$0.00	$32,000.00
Direct labor	$18,000.00	$16,000.00	$0.00	$34,000.00
Applied overhead (50% of direct labor)	$9,000.00	$8,000.00	$0.00	$17,000.00
Beginning Goods in Process	$41,000.00	$42,000.00	$0.00	$83,000.00
For April:
Direct material	$100,000.00	$170,000.00	$80,000.00	$350,000.00
Direct labor	$30,000.00	$56,000.00	$120,000.00	$206,000.00
Applied overhead (50% of direct labor)	$15,000.00	$28,000.00	$60,000.00	$103,000.00
Total Cost added in April	$145,000.00	$254,000.00	$260,000.00	$659,000.00
Total Costs (April 30)	$186,000.00	$296,000.00	$260,000.00	$742,000.00
Status on April 30	Finished (Sold)	Finished (Unsold)	In Process
April 30 cost included in	Cost of goods sold	Finished goods inventory	Work In Process Inventory

Solution 2:

Journal Entries - Winfrey Company
Event	Particulars	Debit	Credit
a1	Raw material inventory Dr	$400,000.00
	To Accounts Payable		$400,000.00
	(To record purchase of raw material)
a2	Factory Wages Dr	$220,000.00
	To Cash		$220,000.00
	(To record payment of factory wages)
a3	Factory Overhead Dr	$106,000.00
	To Raw material inventory		$30,000.00
	To Factory Wages		$14,000.00
	To Cash		$32,000.00
	To Accumulated depreciation - Equipment		$30,000.00
	(To record factory overhead cost incurred)
b1	Work In Process Dr	$350,000.00
	To Raw material inventory		$350,000.00
	(To record raw material used in production)
b2	Work In Process Dr	$206,000.00
	To Factory Wages		$206,000.00
	(To record direct labor assigned to production)
b3	Factory overhead Dr	$103,000.00
	To Work In Process		$103,000.00
	(To apply factory overhead)
c	Finished goods inventory Dr	$482,000.00
	To Work In Process		$482,000.00
	(Being completed jobs transferred to finished goods)
d	Cost of goods sold Dr	$186,000.00
	To Finished goods inventory		$186,000.00
	(To record cost of goods sold for Job 306)
e	Cash Dr	$380,000.00
	To Sales Revenue		$380,000.00
	(To record sales of Job 306)
f	Cost of goods sold Dr	$3,000.00
	To Factory Overhead ($106,000 - $103,000)		$3,000.00
	(To close underapplied overhead to COGS)

Solution 3:

Winfrey company
Schedule of cost of goods manufactured
For the month ended April 30
Particulars	Amount
Direct material	$350,000.00
Direct labor	$206,000.00
Applied overhead (50% of DL Cost)	$103,000.00
Total manufacturing costs	$659,000.00
Add: Beginning WIP	$83,000.00
Total cost of work in process	$742,000.00
Less: Ending WIP	$260,000.00
Cost of goods manufactured	$482,000.00

Solution 4.1:

Winfrey company
Computation of Gross Profit
For the month ended April 30
Particulars	Amount
Sales	$380,000.00
Cost of goods sold ($186,000+$3,000)	$189,000.00
Gross Profit	$191,000.00

Solution 4.2:

Inventories - April 30
Particulars	Amount
Raw material inventory ($150,000 + $400,000 - $350,000 - $30,000)	$170,000.00
Work In Process Inventory	$260,000.00
Finished goods inventory	$296,000.00
Total	$726,000.00