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
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