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	30,500	May 31	Requisitions	(a)
31	Purchases	122,600

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	123,800

Factory Overhead
May 1	Balance	22,900	May 31	Factory overhead applied	(e)
31	Indirect labor	(h)
31	Indirect materials	16,300
31	Other overhead	98,200

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	230			$22,890				$18,000
   102		AF3	400			34,400				26,000
   103		AF2	170			11,040				7,000
   104		VY1	270			34,190				26,000
   105		VY2	180			20,780				17,000
   106		AF4	150			7,100				5,000
   		Total	1,400			$130,400				$99,000

2. Factory overhead is applied to each job at a rate of 160% 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	$6,900
   102	AF3	16,000
   Total		$22,900

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	184
   102	AF3	X	320
   103	AF2		0
   104	VY1	X	227
   105	VY2	X	149
   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		$ 6,900		$ 22,890		$ 18,000		$		$		$				$
No. 102		16,000		34,400		26,000
No. 103				11,040		7,000
No. 104				34,190		26,000
No. 105				20,780		17,000
No. 106				7,100		5,000
Total		$22,900		$130,400		$99,000		$		$						$

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

1.

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	230	6900	22890	18000	28800	76590	333	184	61272
No. 102	400	16000	34400	26000	41600	118000	295	320	94400
No. 103	170		11040	7000	11200	29240		0	0
No. 104	270		34190	26000	41600	101790	377	227	85579
No. 105	180		20780	17000	27200	64980	361	149	53789
No. 106	150		7100	5000	8000	20100		0	0
Total	1400	22900	130400	99000	158400	410700			295040

a.	Materials requisitions ($130400 + $16300)	146700
b.	Work in process beginning balance	22900
c.	Direct materials	130400
d.	Direct labor	99000
e.	Factory overhead applied (160% x $99000)	158400
f.	Completed jobs ($76590 + 118000 + 101790 + 64980)	361360
g.	Cost of goods sold	295040
h.	Indirect labor ($123800 - $99000)	24800

2.

Materials ($30500 + $122600 - $146700)	6400
Work in Process ($410700 - $361360)	49340
Finished Goods ($0 + $361360 - $295040)	66320
Factory Overhead ($22900 + 24800 + 16300 + 98200 - 158400)	3800