Question

Bonita, Inc. manufactures ergonomically designed computer furniture. Bonita uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs:

Job No.		Item		Units		Accumulated Cost
CC723		Computer caddy		21,000			$1,000,000
CH291		Chair		20,000			436,000
PS812		Printer stand		25,000			257,000
							$1,693,000

On November 30, Bonita’s Raw Materials Inventory account totaled $676,000, and its Finished Goods Inventory totaled $3,456,400. Bonita applies manufacturing overhead on the basis of machine hours. The company’s manufacturing overhead budget for the year totaled $4,550,000, and the company planned to use 910,000 machine hours during the year. Through the first eleven months of the year, the company used a total of 840,000 machine hours, total manufacturing overhead amounted to $4,284,500, and Cost of Goods Sold was $8,760,250. For the pursposes of this problem, ignore year-end disposition of over / under applied overhead.

Bonita purchased $638,000 in raw materials in December and incurred the following costs for jobs in process that month:

Job No.		Materials Issued		Machine Hours		Direct Labor Hours		Direct Labor Cost
CC723		$169,000		16,000		13,800		$129,400
CH291		$14,800		4,500		3,700		$49,200
PS812		$215,000		22,000		15,300		$219,500
DS444		$252,000		17,000		14,100		$150,000

The following jobs were completed in December and transferred to the Finished Goods Inventory:

Job No.		Item		Units
CC723		Computer caddy		21,000
CH291		Chair		20,000
DS444		Desk		7,000

(a)	Calculate the total cost of each of the four jobs worked on in December.
	CC723 CH291 PS812 DS444 Total Cost $Enter a dollar amount Enter a dollar amount $Enter a dollar amount Enter a dollar amount $Enter a dollar amount Enter a dollar amount $Enter a dollar amount Enter a dollar amount

(b)	Calculate the total manufacturing cost for December.
	Total manufacturing cost $Enter total manufacturing cost in dollars Enter total manufacturing cost in dollars

(c)	Calculate the cost of goods manufactured for December.
	Cost of goods manufactured $Enter cost of goods manufactured in dollars Enter cost of goods manufactured in dollars

(d)	Calculate the balance in the Work in Process Inventory account on December 31.
	Balance in work in process $Enter the balance in work in process in dollars Enter the balance in work in process in dollars

(e)	Assume that Bonita sold 15,000 computer caddies, 12,000 chairs, and 4,500 desks in December. Calculate Cost of Goods Sold for the month of December and the ending Finished Goods Inventory balance on December 31. (For computation purpose round per unit rates to 2 decimal places, e.g. 3.54. Round final answers to 0 decmial places, e.g. 45,000.)
	Cost of goods sold $Enter cost of goods sold in dollars rounded to 0 decimal places Enter cost of goods sold in dollars rounded to 0 decimal places Finished goods inventory $Enter finished goods inventory in dollars rounded to 0 decimal places Enter finished goods inventory in dollars rounded to 0 decimal places

Answer 1

	Overhead rate =		4,550,000/910,000
			5	per machine hour
			CC723	CH291	PS812	DS444	Total
Begininning work in process			1,000,000	436,000	257,000	0	1,693,000
cost added during the year
Materials issued			169,000	14,800	215,000	252,000	650,800
Direct labor cost			129,400	49,200	219,500	150,000	548,100
overhead applied			80000	22500	110000	85000	297500
total cost added during the year			378,400	86,500	544,500	487,000	1,496,400
total cost.			1,378,400	522,500	801,500	487,000	3,189,400
(a)			CC723	CH291	PS812	DS444
	total cost		1,378,400	522,500	801,500	487,000
(b)	total manufacturing cost			1,496,400
	(for December)
(c.)	Cost of goods manufactured			2,387,900
	(total of job CC723+Ch291+DS444)
(d)	Balance in work in process			801,500
(e.)	Cost of goods sold			1303000
	Finished goods inventory			4233205
					CC723	CH291	DS444
	total cost	(a)			1,378,400	522,500	487,000
	units accumulated (b)				21,000	20,000	7,000
	cost per unit c=a/b				65.64	26.13	69.57
	units sold	(d)			15,000	12,000	4,500
	total cost of goods sold e=c*d				984600	313560	4840	1303000
	Balance in hand units				6,000	8,000	2,500
	total cost of finished goods				393840	209040	173925	776805	current
								3,456,400	opening balance
								4233205	total finished goods in hand