Question

Analyzing Manufacturing Cost Accounts

Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for June:

Materials
June 1	Balance	37,900	June 30	Requisitions	(A)
June 30	Purchases	152,100

Work in Process
June 1	Balance	(B)	June 30	Completed jobs	(F)
June 30	Materials	(C)
June 30	Direct labor	(D)
June 30	Factory overhead applied	(E)

Finished Goods
June 1	Balance	0	June 30	Cost of goods sold	(G)
June 30	Completed jobs	(F)

Wages Payable
			June 30	Wages incurred	121,300

Factory Overhead
June 1	Balance	22,300	June 30	Factory overhead applied	(E)
June 30	Indirect labor	(H)
June 30	Indirect materials	20,200
June 30	Other overhead	61,700

In addition, the following information is available:

a. Materials and direct labor were applied to six jobs in July:

Job No.		Style	Quantity		Direct Materials				Direct Labor
201		T100	200			$26,300				$15,000
202		T200	410			43,620				26,000
203		T400	210			16,680				9,000
204		S200	240			38,740				25,000
205		T300	190			27,000				18,000
206		S100	130			9,520				4,000
		Total	1,380			$161,860				$97,000

b. Factory overhead is applied to each job at a rate of 130% of direct labor cost.

c. The June 1 Work in Process balance consisted of two jobs, as follows:

Job No.	Style	Work in Process, June 1
201	T100	$6,000
202	T200	16,300
Total		$22,300

d. Customer jobs completed and units sold in July were as follows:

Job No.	Style	Completed in July	Units Sold in July
201	T100	X	160
202	T200	X	328
203	T400		0
204	S200	X	202
205	T300	X	158
206	S100		0

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	June 1 Work in Process		Direct Materials		Direct Labor		Factory Overhead		Total Cost		Unit Cost		Units Sold	Cost of Goods Sold
No. 201		$ 6,000		$ 26,300		$ 15,000		$		$		$				$
No. 202		16,300		43,620		26,000
No. 203				16,680		9,000
No. 204				38,740		25,000
No. 205				27,000		18,000
No. 206				9,520		4,000
Total		$22,300		161,860		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 June 30 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

Part 1

Job No.	Quantity	July 1 Work in Process	Direct Materials	Direct Labor	Factory Overhead (direct labor *130%)	Total Cost	Unit Cost	Units Sold	Cost of Goods Sold
No. 201	200	6000	26300	15000	19500	66800	334.00	160	53440
No. 202	410	16300	43620	26000	33800	119720	292.00	328	95776
No. 203	210		16680	9000	11700	37380	0.00	0	0
No. 204	240		38740	25000	32500	96240	401.00	202	81002
No. 205	190		27000	18000	23400	68400	360.00	158	56880
No. 206	130		9520	4000	5200	18720	0.00	0	0
Total	1380	22300	161860	97000	126100	407260			287098

Part A

Materials Requisitions = Materials applied to production in July + indirect materials = 161860+20200 = $182060

Part B

Work in Process Beginning Balance = $22300

Part C

Direct Materials = $161860

Part D

Direct Labor = $97000

Part E

Factory overhead applied = $126100 (97000*130%)

Part F

Completed jobs =$351160 (66800+119720+96240+68400)

Part G

Cost of goods sold = $287098

Part H

Indirect labor = Wages incurred - direct labor applied to production in July = 121300-97000 = $24300

Part 2

Materials:	$7940	(37900+152100-182060)
Work in Process:	$56100	(37380+18720) (Job 203 and Job 206)
Finished Goods:	$64062	(351160-287098)
Factory Overhead:	$2400 DR. Underapplied overhead	(22300+24300+20200+61700-126100)