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	30,400	May 31	Requisitions	(a)
31	Purchases	121,900

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	122,500

Factory Overhead
May 1	Balance	19,900	May 31	Factory overhead applied	(e)
31	Indirect labor	(h)
31	Indirect materials	16,200
31	Other overhead	100,000

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	170			$16,620				$13,000
   102		AF3	380			32,140				24,000
   103		AF2	230			16,160				9,000
   104		VY1	280			35,480				29,000
   105		VY2	190			21,030				18,000
   106		AF4	140			8,280				5,000
   		Total	1,390			$129,710				$98,000

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	$5,000
   102	AF3	14,900
   Total		$19,900

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	136
   102	AF3	X	304
   103	AF2		0
   104	VY1	X	235
   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		$ 5,000		$ 16,620		$ 13,000		$		$		$				$
No. 102		14,900		32,140		24,000
No. 103				16,160		9,000
No. 104				35,480		29,000
No. 105				21,030		18,000
No. 106				8,280		5,000
Total		$19,900		$129,710		$98,000		$		$						$

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	170	$5000		$16620		$13000		(13000*160%)= 20800		$55420		(55420/170)= $326		136		($326*136)= $44336
No. 102	380	14900		32140		24000		(24000*160%)= 38400		109440		(109440/380)= 288		304		($288*304)= 87552
No. 103	230			16160		9000		(9000*160%)= 14400		39560
No. 104	280			35480		29000		(29000*160%)= 46400		110880		(110880/280)= 396		235		($396*235)= 93060
No. 105	190			21030		18000		(18000*160%)= 28800		67830		(67830/190)= 357		158		($357*158)= 56406
No. 106	140			8280		5000		(5000*160%)= 8000		21280
Total	1390	$19900		$129710		$98000		$156800		$404410						$281354

a. Materials requisition= Direct materials+Indirect materials

= $129710+16200= $145910

b. Work in process beginning balance= Work in process, May 1 Job No. 101+Work in process, May 1 Job No. 102

= $5000+14900= $19900

c. Direct materials= $129710

d. Direct labor= $98000

e. Factory overhead applied= $156800

f. Completed jobs= Total cost of Job No 101+Total cost of Job No 102+Total cost of Job No 104+Total cost of Job No 105

= $55420+109440+110880+67830= $343570

g. Cost of goods sold= $281354

h. Indirect labor= Total wages incurred-Direct labor

= $122500-98000= $24500

2) Materials= Beginning balance+Purchases-Requisitions

= $30400+121900-145910= $6390

Work in process= Beginning balance+Materials+Direct labor+Factory overhead-Completed jobs

= $19900+129710+98000+156800-343570= $60840

Finished goods= Beginning balance+Completed jobs-Cost of goods sold

= $0+343570-281354= $62216

Actual factory overhead= Balance+Indirect labor+Indirect materials+Other overhead

= $19900+24500+16200+100000= $160600

Factory overhead= Factory overhead applied-Actual factory overhead

= $156800-160600= $3800 under applied overhead

NOTE:- For any problem regarding the answer please ask in the comment section.