Prepare entries in a job order cost system and job cost sheets.

Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs.

On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows:

direct materials $20,000,

direct labor $12,000, and

manufacturing overhead $16,000.

As of January 1, Job 49 had been completed at a cost of $90,000 and was part of finished goods inventory.

There was a $15,000 balance in the Raw Materials Inventory account.

During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51.

Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively.

The following additional events occurred during the month:

1.Purchased additional raw materials of $90,000 on account.

2.Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes.

3.Incurred manufacturing overhead costs as follows: indirect materials $17,000, indirect labor $20,000, depreciation expense on equipment $12,000, and various other manufacturing overhead costs on account $16,000.

4.Assigned direct materials and direct labor to jobs as follows.

Instructions

a.  Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year.

b.  Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50.

c.  Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.

d.  Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.

Instructions

e.  Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month.

Job 50, $69,000

Job 51, $94,000

f.  Prepare the journal entry (or entries) to record the sale of any job(s) during the month.

g.  What is the balance in the Finished Goods Inventory account at the end of the month? What does this balance consist of?

h.  What is the amount of over- or underapplied overhead?

Classify the following expenses incurred by a fertilizer business according to cost classification (fixed cost, variable cost, mixed cost, direct material, direct labour, overhead cost and period cost)
i. Salaries of production workers

ii. Salaries of factory’s manager

iii. Commission of salesperson

iv.Depreciation of machinery in plant

v. Depreciation of office equipment

vi. Chemical used in the production

vii. Delivery expenses

viii. Indirect materials

A firm’s fixed cost $50,000 and its variable cost is $3 per unit. The selling price $5 per unit. The management is considering two projects but only one would be selected. Project A will result in an increase in fixed cost, which will amount to $150,000 and a decrease in variable cost which fall to $2. Project B is less ambitious undertaking that results in fixed costs increasing to $70,000 and variable costs decreasing to $2.30 per unit. Currently 55,000 units are sold each year and sales are considered stable.

What is DOL for 55,000 for the three alternatives? Which firm is risky considering just the fixed costs?

ABC Company purchased equipment that cost $2,000,000 on January 1, 2019. The entire cost was recorded as an expense. The equipment had a ten-year life and a $100,000 residual value. ABC uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. ABC is subject to a 30% tax rate.

What is the adjustment to retained earnings at January 1, 2022?

RooPhone Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,000 units of cellular phones are as follows: (7 points) Variable costs Fixed Costs: Direct materials $625,000 Factory overhead $215,000 Direct labor 225,000 Selling & Admin. expenses 75,000 Factory Overhead 200,000 Selling & admin. Exp. 150,000 $1,200,000 RooPhone desires a profit equal to a 18% rate of return on invested assets of $550,000. Required: a.) Determine the amount of desired profit. b.) Determine the product cost per unit for the production of 5,000 phones. c.) Determine the total cost markup percentage (e.g. 20%) using the product cost concept. d.) Determine the selling price of each cellular phone. Round to nearest dollar.

Brita Company incurred $154,000 of fixed cost and $171,600 of variable cost when 3,900 units of product were made and sold.

If the company's volume increases to 4,400 units (within relevant range), the total cost per unit will be:

A. $39.00.

B. $74.00.

C. $35.00.

D. $79.00.

Standard absorption cost per unit - A cost analyst for Stamper Manufacturing Co. has assembled the following data about the Model 24 stamp pad:

- The piece of sheet metal from which eight pad cases can be made costs $0.14.
- This amount is based on the number of sheets in a 3,000-pound bundle of sheet metal, which is the usual purchase quanity.
- The foam pad that is put in the case costs $0.02, based on the number of pads that can be cut from a large roll of foam.
- Production standards, based on engineering analysis recognizing attainable performance, provide for the manufacture of 1,800 pads by two workers in an eight-hour shift. The standard direct labor pay rate is $11 per hour.
- Manufacturing overhead is applied to units produced using a predetermined overhead application rate of $16 per direct labor hour, of which $7 per hour is fixed manufacturing overhead.

a. calculate the standard absorption cost of a package of 12 stamp pads

b. Stamper Manufacturing Co.'s, management is considering a special promotion that would result in increased sales of 2,000 packages of 12 pads per package. Calculate the cost per package that is relevant for this analysis.