Question

Scholastic Brass Corporation manufactures brass musical instruments for use by high school students.
The company uses a normal costing system, in which manufacturing overhead is applied on the basis of
direct-labor hours. The company’s budget for the current year included the following predictions.
■ Problem 3–57
Comprehensive Job-Order
Costing Problem
(LO 3-2, 3-4, 3-5, 3-6)
1. Predetermined overhead
rate: $21 per direct-labor hour
4. Total actual overhead:
$33,900
7. Income (loss): $(1,625)
Budgeted total manufacturing overhead ........................................................................................................... $426,300
Budgeted total direct-labor hours (based on practical capacity) ...................................................................... 20,300
Chapter 3 Product Costing and Cost Accumulation in a Batch Production Environment 129
During March, the firm worked on the following two production jobs:
Job number T81, consisting of 76 trombones
Job number C40, consisting of 110 cornets
The events of March are described as follows:
a. One thousand square feet of rolled brass sheet metal were purchased on account for $5,000.
b. Four hundred pounds of brass tubing were purchased on account for $4,000.
c. The following requisitions were submitted on March 5:
Direct labor: Job number T81, 800 hours at $20 per hour
Direct labor: Job number C40, 900 hours at $20 per hour
Indirect labor: General factory cleanup, $4,000
Indirect labor: Factory supervisory salaries, $9,000
Requisition number 112: 250 square feet of brass sheet metal at $5 per square foot (for job number T81)
Requisition number 113: 1,000 pounds of brass tubing, at $10 per pound (for job number C40)
Requisition number 114: 10 gallons of valve lubricant, at $10 per gallon
All brass used in production is treated as direct material. Valve lubricant is an indirect material.
d. An analysis of labor time cards revealed the following labor usage for March.
e. Depreciation of the factory building and equipment during March amounted to $12,000.
f. Rent paid in cash for warehouse space used during March was $1,200.
g. Utility costs incurred during March amounted to $2,100. The invoices for these costs were
received, but the bills were not paid in March.
h. March property taxes on the factory were paid in cash, $2,400.
i. The insurance cost covering factory operations for the month of March was $3,100. The insurance
policy had been prepaid.
j. The costs of salaries and fringe benefits for sales and administrative personnel paid in cash during
March amounted to $8,000.
k. Depreciation on administrative office equipment and space amounted to $4,000.
l. Other selling and administrative expenses paid in cash during March amounted to $1,000.
m. Job number T81 was completed on March 20.
n. Half of the trombones in job number T81 were sold on account during March for $700 each.
The March 1 balances in selected accounts are as follows:
Cash .................................................................................................................................................................... $ 10,000
Accounts Receivable .......................................................................................................................................... 21,000
Prepaid Insurance .............................................................................................................................................. 5,000
Raw-Material Inventory ...................................................................................................................................... 149,000
Manufacturing Supplies Inventory ..................................................................................................................... 500
Work-in-Process Inventory ................................................................................................................................. 91,000
Finished-Goods Inventory .................................................................................................................................. 220,000
Accumulated Depreciation: Buildings and Equipment ..................................................................................... 102,000
Accounts Payable ............................................................................................................................................... 13,000
Wages Payable ................................................................................................................................................... 8,000

Please Can you Answer Question number 3 ( T Account Only)

2. Prepare journal entries to record the events of March.

3. Set up T-accounts, and post the journal entries made in requirement (2).

Answer 1

Requirement 3: Post the journal entries to T-accounts as follows

Notes

Direct material	Amount	Amount
Requisition 112: 250 × $5	$1,250
Requisition 113: 1,000 × $10	$10,000	$11,250
Indirect material
Requisition 114: 10 × $10	$100	$100
Direct labor
Job - T: 800 × $20	$16,000
Job - C: 900 × $20	$18,000	$34,000
Indirect labor
Factory cleanup	$4,000
Factory supervisor salaries	$9,000	$13,000
Total wages		$47,000
Manufacturing overhead applied
(800 hours + 900 hours) × $21 per hour	$35,700
Job - T
Direct material (250 × $5)	$1,250
Direct labor (800 × $20)	$16,000
Manufacturing overhead (800 × $21)	$16,800
Total cost	$34,050
Sales Revenue
76 trombones ÷ 2 × $700	$26,600
Cost of goods sold
$34,050 ÷ 2	$17,025