Question

In: Accounting

Bronco Company uses normal costing in its​ job-costing system. The company produces custom bikes for toddlers....

Bronco Company uses normal costing in its​ job-costing system. The company produces custom bikes for toddlers. The beginning balances​ (December 1) and ending balances​ (as of December​ 30) in their inventory accounts are as​ follows:

Beginning Balance 12/1 Ending Balance 12/30
Material Control $ 1,500 $ 7,900
Work-in-process control 6,100 8,400
Manufacturing Department Overhead Control -- 97,500
Finished Goods Control 3,800 18,800

Additional information​ follows:

a.

 Direct materials purchased during December were $65,700.

b.

 Cost of goods manufactured for December was $228,000.

c.

No direct materials were returned to suppliers.

d.

No units were started or completed on December 31 and no direct materials were requisitioned on December 31.

e.

 The manufacturing labor costs for the December 31 working​ day: direct manufacturing​ labor, $4,000​,
and indirect manufacturing​ labor, $1,100.

f.

 Manufacturing overhead has been allocated at 150​%
of direct manufacturing labor costs through December 31.

Question:

1.

Prepare journal entries for the December 31 payroll.

2.

Use​ T-accounts to compute the​ following:

a.

The total amount of materials requisitioned into work in process during December

b.

The total amount of direct manufacturing labor recorded in work in process during December​(Hint: You have to solve requirements 2b and 2c ​simultaneously)

c.

The total amount of manufacturing overhead recorded in work in process during December

d.

Ending balance in work in​ process, December 31

e.

Cost of goods sold for December before adjustments for​ under- or overallocated manufacturing overhead

3.

Prepare closing journal entries related to manufacturing overhead. Assume that all​ under- or overallocated manufacturing overhead is closed directly to Cost of Goods Sold.

Solutions

Expert Solution

Ans to Q-1 Journal Entry for payroll Calculation of manufacturing labour
Account Debit Credit We Know,
Manufacturing Labour        4,000.00 Direct Material+Direct Labour+ Direct Overhead+ Opening Work In Process- Closing Work in Process= Cost of goods manufactures
Indirect Manufacturing Labour        1,100.00 IF we take Direct Labour= 100X
Labour Payable                            5,100.00 Direct Overhead will be 150X 150% of Direct Labour
So, 59,300+100X+150X+6,100-8,400= 228,000
T Accounts or, 250X = 228,000+8,400-6100-59300
Material Control Note 250X = 171000
Debit Credit Ans to 2 a X = 171000/250
Balance as on 12/1        1,500.00 Work-in-process control      59,300.00 Balancing figure Materials requisitioned into work in process during December is $ 59,300. X = 684
Material Purchased      65,700.00 Balance as on 12/30        7,900.00 Direct Labour=100X = 684*100
Total     67,200.00 Total     67,200.00 =     68,400.00
Direct Labour as on 12/30      68,400.00 Direct Overhead as on 12/30 102,600.00 150% of Direct Labour
Work-in-process control Costs for Dec-31        4,000.00 Direct Overhead       6,000.00 150% of Direct Labour
Balance as on 12/1        6,100.00 Finished Goods Control 228,000.00 Ans to 2 b Direct Labour as on 12/31     72,400.00
Material Control      59,300.00 Balance as on 12/30        8,400.00 Ans to 2 c Direct Overhead as on 12/31 108,600.00 150% of Direct Labour
Manufacturing Labour      68,400.00
Manufacturing Overhead Control 102,600.00
Total 236,400.00 Total 236,400.00
Balance as on 12/30        8,400.00 Ans to 2 d
Manufacturing Labour        4,000.00 Ending balance in work in​ process, December 31 is $ 18,400.
Manufacturing Overhead Control        6,000.00 Balance as on 12/31      18,400.00 Balancing figure
Total     18,400.00 Total     18,400.00
Finished Goods Control Ans to 2 e
Balance as on 12/1        3,800.00 Cost of Goods sold 223,400.00 Balancing figure Cost of Goods sold before adjustment of over/under allocation of manufacturing overheads.
Work-in-process control 228,000.00 Balance as on 12/30        8,400.00
Total 231,800.00 Total 231,800.00
Manufacturing Overhead Control
Balance as on 12/30      97,500.00 Work-in-process control 102,600.00
Cost of Goods sold        5,100.00 Balancing figure
Total 102,600.00 Total 102,600.00

Note: After calculating the value of manufacturing labour and manufacturing overhead, work in process control account is matching. This is the proof the solution is correct. journal entry for Q-3 is in image due to character limit.

Screenshot of workings also attached for better understanding.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Bramble Company uses normal costing in its​ job-costing system. The company produces custom bikes for toddlers....
Bramble Company uses normal costing in its​ job-costing system. The company produces custom bikes for toddlers. The beginning balances​ (December 1) and ending balances​ (as of December​ 30) in their inventory accounts are as​ follows: Beginning Balance 12/1 Ending Balance 12/30 Material Control $ 1,800 $ 8,200 Work-in-process control 6,400 8,700 Manufacturing Department Overhead Control -- 92,500 Finished Goods Control 4,100 19,100 Additional information​ follows: a. Direct materials purchased during December were $66,000. b. Cost of goods manufactured for December...
Arensky Company uses normal costing to account for overhead in its job costing system. There are...
Arensky Company uses normal costing to account for overhead in its job costing system. There are 2 departments in the company: Designing and Machining. The Designing Dept. is labor intensive; the Machining Dept. is machine intensive. (OH= Overhead; DLH= Direct Labor Hours; MH= Machine Hours.) The budget for 2019 is as follows: Designing   Machining Est. OH $2,000,000 $5,600,000 Est DLH 40,000 Hours 10,000 Hours Est MH. 20,000 Hours 70,000 Hours Actual Results are as follows: Designing Machining Actual OH $2,100,000...
Clear View is a manufacturer of custom windows and uses a job-costing system at its Orlando,...
Clear View is a manufacturer of custom windows and uses a job-costing system at its Orlando, FL plant. The plant has a machining department and a finishing department. Clear View uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department with machine-hours as the allocation base and the finishing department with direct manufacturing labor costs as the allocation base). The 2014 budget for the plant is as follows:...
Tata Motors produces trucks for commercial use. The company uses a normal job-order costing system to...
Tata Motors produces trucks for commercial use. The company uses a normal job-order costing system to calculate its cost of goods manufactured. On January 01, 2019, there was only one job in process with the following costs: Job A-1 Direct materials $ 5,000 Direct labour 15,000 Applied overhead 19,500 Total $39,000 The following balances were taken from the general ledger of the company as of January 1, 2019: Direct materials inventory $35,000 Finished goods inventory (for Job D-1) $65,000 During...
: Tata Motors produces trucks for commercial use. The company uses a normal job-order costing system...
: Tata Motors produces trucks for commercial use. The company uses a normal job-order costing system to calculate its cost of goods manufactured. On January 01, 2019, there was only one job in process with the following costs: Direct materials Direct labour Applied overhead Total Job A-1 $ 5,000 15,000 18,000 $38,000 The following balances were taken from the general ledger of the company as of January 1, 2019: Direct materials inventory $35,000 Finished goods inventory (for Job D-1) $65,000...
The Lynn Company uses a normal job-costing system at its Minneapolis plant. The plant has a...
The Lynn Company uses a normal job-costing system at its Minneapolis plant. The plant has a machining department and an assembly department. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department overhead, allocated to jobs based on actual machine hours, and the assembly department overhead, allocated to jobs based on actual direct manufacturing labor costs). The 2014 budget for the plant is as follows: Machining Department Assembly...
Erkens Company uses a job costing system with normal costing and applies factory overhead on the...
Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine hours. At the beginning of the year, management estimated that the company would incur $1,980,000 of factory overhead costs and use 66,000 machine hours. Erkens Company recorded the following events during the month of April: Purchased 180,000 pounds of materials on account; the cost was $5.00 per pound. Issued 120,000 pounds of materials to production, of which 15,000 pounds were used...
Erkens Company uses a job costing system with normal costing and applies factory overhead on the...
Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine hours. At the beginning of the year, management estimated that the company would incur $1,680,000 of factory overhead costs and use 60,000 machine hours. Erkens Company recorded the following events during the month of April: Purchased 182,000 pounds of materials on account; the cost was $5.10 per pound. Issued 121,000 pounds of materials to production, of which 15,500 pounds were used...
Erkens Company uses a job costing system with normal costing and applies factory overhead on the...
Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine hours. At the beginning of the year, management estimated that the company would incur $1,860,000 of factory overhead costs and use 60,000 machine hours. Erkens Company recorded the following events during the month of April: a. Purchased 214,000 pounds of materials on account; the cost was $5.10 per pound. b. Issued 137,000 pounds of materials to production, of which 23,500 pounds...
Erkens Company uses a job costing system with normal costing and applies factory overhead on the...
Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine hours. At the beginning of the year, management estimated that the company would incur $2,553,000 of factory overhead costs and use 69,000 machine hours. Erkens Company recorded the following events during the month of April: Purchased 200,000 pounds of materials on account; the cost was $6.00 per pound. Issued 130,000 pounds of materials to production, of which 20,000 pounds were used...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT