Chapter 2 Job Order Costing and Analysis Click
Chapter 2 – Job Order Costing and Analysis Click on links Exercise 2 -4 page 69 Analysis of cost flows Exercise 2 -4 Algo Exercise 2 -5 page 69 OH rates – Costs assigned to jobs Exercise 2 -5 Algo Exercise 2 -6 page 69 Analysis of costs assigned to GIP Exercise 2 -6 Algo Exercise 2 -7 page 70 Cost flows in a job order cost system Exercise 2 -7 Algo Exercise 2 -8 page 70 Journal entries for materials Exercise 2 -8 Algo Exercise 2 -9 page 70 Journal entries for labor Exercise 2 -9 Algo Exercise 2 -10 page 70 Journal entries for overhead Exercise 2 -10 Algo Exercise 2 -11 page 70 Adjusting factory overhead Exercise 2 -11 Algo Exercise 2 -12 page 70 Adjusting factory overhead Exercise 2 -12 Algo Exercise 2 -13 page 70 Recording events in job order costing Exercise 2 -13 Algo Exercise 2 -14 page 71 OH computed, applied, and adjusted Exercise 2 -14 Algo Exercise 2 -15 page 71 OH computed, applied, and adjusted Exercise 2 -15 Algo Exercise 2 -17 page 71 Costs allocated to ending inventories Exercise 2 -17 Algo Mc. Graw-Hill/Irwin Copyright © 2014 by The Mc. Graw-Hill Companies, Inc. All rights reserved.
Exercise 2 -4 page 69 2 -2
As of the end of June, the job cost sheets at Racing Wheels, Inc. , show the following total costs accumulated on three custom jobs. Job 102 Job 103 Job 104 Direct materials $15, 000 $33, 000 $27, 000 Direct labor 8, 000 14, 200 21, 000 Overhead 4, 000 7, 100 10, 500 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $6, 000; direct labor, $1, 800; and overhead, $900. Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. No raw materials are used indirectly in June. Using this information, answer the following questions. (Assume this company’s predetermined overhead rate did not change across these months). Complete the given below table to calculate the cost of the raw materials requisitioned and direct labor cost incurred during June for each of the three jobs. Direct Materials Job May 102 $6, 000 103 104 June $9, 000 33, 000 27, 000 Total $15, 000 33, 000 27, 000 Direct Labor Job 102 103 104 May $1, 800 June $6, 200 14, 200 21, 000 Total $8, 000 14, 200 21, 000 What predetermined overhead rate is used during June for Job 102? Overhead costs Direct labor costs $4, 000 $8, 000 50% 2 -3 Exercise 2 -4 page 69
As of the end of June, the job cost sheets at Racing Wheels, Inc. , show the following total costs accumulated on three custom jobs. Job 102 Job 103 Job 104 Direct materials $29, 000 $81, 000 $65, 000 Direct labor 23, 000 49, 000 33, 000 Overhead 11, 040 23, 520 15, 840 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $13, 000; direct labor, $5, 000; and overhead, $2, 400. Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. No raw materials are used indirectly in June. (Assume this company’s predetermined overhead rate did not change across these months). Calculate the cost of the raw materials requisitioned and direct labor cost incurred during June for each of the three jobs. 2 -4 Exercise 2 -4 page 69 Algorithm
As of the end of June, the job cost sheets at Racing Wheels, Inc. , show the following total costs accumulated on three custom jobs. Job 102 Job 103 Job 104 Direct materials $29, 000 $81, 000 $65, 000 Direct labor 23, 000 49, 000 33, 000 Overhead 11, 040 23, 520 15, 840 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $13, 000; direct labor, $5, 000; and overhead, $2, 400. Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. No raw materials are used indirectly in June. (Assume this company’s predetermined overhead rate did not change across these months). Direct Materials Job May 102 $13, 000 103 104 June $16, 000 81, 000 65, 000 Total $29, 000 81, 000 65, 000 Direct Labor Job 102 103 104 June $18, 000 49, 000 33, 000 Total $23, 000 49, 000 33, 000 May $5, 000 2 -5 Exercise 2 -4 page 69 Algorithm
As of the end of June, the job cost sheets at Racing Wheels, Inc. , show the following total costs accumulated on three custom jobs. Job 102 Job 103 Job 104 Direct materials $29, 000 $81, 000 $65, 000 Direct labor 23, 000 49, 000 33, 000 Overhead 11, 040 23, 520 15, 840 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $13, 000; direct labor, $5, 000; and overhead, $2, 400. Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. No raw materials are used indirectly in June. (Assume this company’s predetermined overhead rate did not change across these months). What predetermined overhead rate is used during June for Job 102? Overhead costs Direct labor costs $11, 040 $23, 000 48% 2 -6 Exercise 2 -4 page 69 Algorithm
Exercise 2 -5 page 69 2 -7
In December 2012, Shire Computer’s management establishes the year 2013 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $747, 500 of overhead costs and $575, 000 of direct labor cost in year 2013. During March 2013, Shire began and completed Job No. 13 -56. 1) What is the predetermined overhead rate for year 2013? Overhead costs Direct labor costs $747, 500 $575, 000 130% 2) Use the information on the following job cost sheet to determine the total cost of Job 13 -56. Customer's Name Job Description JOB COST SHEET Keiser Co. Job No. 13 -56 5 plasma monitors - 61 inch Direct Materials Date Mar. 8 Mar. 11 Mar. 18 Req. No. 4 -129 4 -142 4 -167 Amount $5, 000 7, 020 3, 330 $15, 350 Direct Materials Direct Labor OH Costs Applied Total cost of Job 13 -56 Direct Labor Time-Ticket T-306 T-307 T-308 Amount $700 1, 250 $3, 200 OH Costs Applied Rate 130% Amount $4, 160 $15, 350 3, 200 4, 160 $22, 710 2 -8 Exercise 2 -5 page 69
In December 2012, Shire Computer’s management establishes the year 2013 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $734, 400 of overhead costs and $510, 000 of direct labor cost in year 2013. During March 2013, Shire began and completed Job No. 13 -56. 1) What is the predetermined overhead rate for year 2013? Estimated Overhead costs Estmated Direct labor costs $734, 400 $510, 000 144% 2) Use the information on the following job cost sheet to determine the total cost of the job. Customer's Name Job Description JOB COST SHEET Keiser Co. 5 plasma monitors - 61 inch Direct Materials Date Mar. 8 Mar. 11 Mar. 18 Req. No. 4 -129 4 -142 4 -167 Amount $5, 000 6, 750 3, 000 $14, 750 Direct Materials Direct Labor OH Costs Applied Total cost of Job 13 -56 Job No. 13 -56 Direct Labor Time-Ticket No. T-306 T-307 T-308 Amount $600 8, 100 3, 600 $12, 300 OH Costs Applied Rate 144% Amount $17, 712 $14, 750 12, 300 17, 712 $44, 762 2 -9 Exercise 2 -5 page 69 Algorithm
Exercise 2 -6 page 69 2 -10
Lorenzo Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year-end, the Goods in Process Inventory account shows the following. Date Dec. 31 31 Explanation Direct materials cost Direct labor cost Overhead costs To finished goods Debit 1, 500, 000 300, 000 600, 000 Credit Balance 1, 500, 000 1, 800, 000 2, 400, 000 50, 000 2, 350, 000 1) Determine the overhead rate used (based on direct material cost). Overhead costs Direct material costs $600, 000 $1, 500, 000 40% of Direct material costs 2) Only one job remained in the goods in process inventory at December 31, 2013. Its direct materials cost is $30, 000. How much direct labor cost and overhead cost are assigned to it? Direct Materials + Direct Labor + OH Applied = $50, 000 DM + DL + 40% DM = $50, 000 $30, 000 + DL + (40% x $30, 000) = $50, 000 $30, 000 + DL + $12, 000 = $50, 000 DL = $8, 000 Direct Materials Direct Labor Applied OH (40% of $30, 000) Total cost of job $30, 000 8, 000 12, 000 $50, 000 2 -11 Exercise 2 -6 page 69
Lorenzo Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year-end, the Goods in Process Inventory account shows the following. Dec. 31 31 Explanation Direct materials cost Direct labor cost Overhead costs To finished goods Debit 1, 300, 000 260, 000 650, 000 Credit 2, 145, 000 Balance 1, 300, 000 1, 560, 000 2, 210, 000 65, 000 1) Determine the overhead rate used (based on direct material cost). Overhead costs Direct material costs $650, 000 $1, 300, 000 50% of Direct material costs 2) Only one job remained in the goods in process inventory at December 31, 2013. Its direct materials cost is $30, 000. How much direct labor cost and overhead cost are assigned to it? Direct Materials + Direct Labor + OH Applied = $65, 000 DM + DL + 50% DM = $65, 000 $30, 000 + DL + (50% x $30, 000) = $65, 000 $30, 000 + DL + $15, 000 = $65, 000 DL = $20, 000 Direct Materials Direct Labor Applied OH (50% of $30, 000) $30, 000 20, 000 15, 000 $65, 000 2 -12 Exercise 2 -6 page 69 Algorithm
Exercise 2 -7 page 70 2 -13
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% Compute the following amounts for the month of May using T-accounts. 1) Cost of direct materials used 2) Cost of direct labor used 3) Cost of goods manufactured 4) Cost of goods sold 5) Gross profit 6) Overapplied or underapplied overhead 2 -14 Exercise 2 -7 page 70
Inventories April 30 Raw materials $43, 000 Goods in process 10, 200 Finished goods 63, 000 May 31 $52, 000 21, 300 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% Raw Materials (RM) RM - April 30 43, 000 RM Purch 210, 000 15, 000 Ind. Mtls. 186, 000 DM used RM - May 31 52, 000 Factory Payroll 345, 000 80, 000 Ind. Labor 265, 000 DL Used Factory Overhead Ind. Mtls. 15, 000 Ind. Labor 80, 000 Other OH 120, 000 185, 500 OH applied Underapplied OH 29, 500 Goods in Process (GIP) GIP - April 30 10, 200 DM used 186, 000 DL Used 265, 000 OH applied 185, 500 625, 400 Cof. GM GIP - May 31 21, 300 Finished Goods (FG) 63, 000 625, 400 652, 800 Cof. GS FG - May 31 35, 600 FG - April 30 Cof. GM Income Statement (partial) Sales $1, 400, 000 Cost of Goods Sold (652, 800) Gross profit $747, 200 2 -15 Exercise 2 -7 page 70
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost May 31 $38, 000 21, 600 34, 200 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% Compute the following amounts for the month of May using T-accounts. 1) Cost of direct materials used 2) Cost of direct labor used 3) Cost of goods manufactured 4) Cost of goods sold 5) Gross profit 6) Overapplied or underapplied overhead 2 -16 Exercise 2 -7 page 70 Algorithm
Inventories Raw materials Goods in process Finished goods April 30 $47, 000 10, 800 56, 000 May 31 $38, 000 21, 600 34, 200 Activities and information for May: Raw materials purchases (paid with cash) $197, 000 Factory payroll (paid with cash) 177, 000 Factory overhead Indirect materials 29, 600 Indirect labor 26, 600 Other overhead costs 41, 600 Sales (received in cash) 930, 000 Predetermined overhead rate based on direct labor cost 55% Raw Materials (RM) RM - April 30 47, 000 RM Purch 197, 000 29, 600 Ind. mtls. 176, 400 DM used RM - May 31 38, 000 Factory Payroll 177, 000 26, 600 Ind. labor 150, 400 DL used Ind. mtls. Ind. labor Other OH Factory Overhead 29, 600 26, 600 41, 600 82, 720 OH applied Goods in Process (GIP) GIP - April 30 10, 800 DM used 176, 400 DL used 150, 400 OH applied 82, 720 398, 720 Cof. GM GIP - May 31 21, 600 Finished Goods (FG) 56, 000 398, 720 420, 520 Cof. GS FG - May 31 34, 200 FG - April 30 Cof. GM Income Statement (partial) Sales Cost of Goods Sold Gross profit $930, 000 (420, 520) $509, 480 2 -17 Exercise 2 -7 page 70 Algorithm
1) 2) 3) 4) 5) 6) Cost of direct materials used. Cost of direct labor used. Cost of goods manufactured. Cost of goods sold (Ignore any overapplied or underapplied overhead) Gross profit. Over (under) applied overhead. Raw Materials (RM) RM - April 30 47, 000 RM Purch 197, 000 29, 600 Ind. mtls. 176, 400 DM used RM - May 31 38, 000 Factory Payroll 177, 000 26, 600 Ind. labor 150, 400 DL used Ind. mtls. Ind. labor Other OH Underapplied Factory Overhead 29, 600 26, 600 41, 600 82, 720 OH applied 15, 080 $176, 400 150, 400 398, 720 420, 520 509, 480 15, 080 Underapplied Goods in Process (GIP) GIP - April 30 10, 800 DM used 176, 400 DL used 150, 400 OH applied 82, 720 398, 720 Cof. GM GIP - May 31 21, 600 Finished Goods (FG) FG - April 30 56, 000 Cof. GM 398, 720 420, 520 Cof. GS FG - May 31 34, 200 Income Statement (partial) Sales Cost of Goods Sold Gross profit $930, 000 (420, 520) $509, 480 2 -18 Exercise 2 -7 page 70 Algorithm
Exercise 2 -8 page 70 2 -19
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% Prepare journal entries for the following events for the month of May. 1) Raw materials purchases for cash. 2) Direct materials usage. 3) Indirect materials usage. 2 -20 Exercise 2 -8 page 70
Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% 1) 2) 3) Raw Materials (RM) RM - April 30 43, 000 RM Purch 210, 000 15, 000 Ind. Mtls. 186, 000 DM used RM - May 31 52, 000 General Journal Raw materials inventory Cash Debit 210, 000 Goods in process inventory Raw materials inventory 186, 000 Factory overhead Raw materials inventory 15, 000 Credit 210, 000 186, 000 15, 000 2 -21 Exercise 2 -8 page 70
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost May 31 $38, 000 21, 600 34, 200 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% Prepare journal entries for the following events for the month of May. 1) Raw materials purchases for cash. 2) Direct materials usage. 3) Indirect materials usage. 2 -22 Exercise 2 -8 page 70 Algorithm
Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate May 31 $38, 000 21, 600 34, 200 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% 1) Raw materials purchases for cash. 2) Direct materials usage. 3) Indirect materials usage. 1) 2) 3) RM - April 30 RM Purch Raw Materials (RM) 47, 000 197, 000 29, 600 Ind. Mtls. 176, 400 DM used RM - May 31 General Journal Raw materials inventory Cash Debit 197, 000 Goods in process inventory Raw materials inventory 176, 400 Factory overhead Raw materials inventory 29, 600 38, 000 Credit 197, 000 176, 400 29, 600 2 -23 Exercise 2 -8 page 70 Algorithm
Exercise 2 -9 page 70 2 -24
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% Prepare journal entries for the following events for the month of May. 1) Factory payroll costs, paid in cash. 2) Direct labor usage. 3) Indirect labor usage. 2 -25 Exercise 2 -9 page 70
Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% General Journal 1) 2) 3) Factory payroll Cash Goods in process inventory Factory payroll Factory overhead Factory payroll Factory Payroll 345, 000 80, 000 Ind. Labor 265, 000 DL Used Debit 345, 000 Credit 345, 000 265, 000 80, 000 2 -26 Exercise 2 -9 page 70
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost May 31 $38, 000 21, 600 34, 200 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% Prepare journal entries for the following events for the month of May. 1) Factory payroll costs, paid in cash. 2) Direct labor usage. 3) Indirect labor usage. 2 -27 Exercise 2 -9 page 70 Algorithm
Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate May 31 $38, 000 21, 600 34, 200 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% 1) Factory payroll costs in cash. 2) Direct labor usage. 3) Indirect labor usage. General Journal 1) 2) 3) Factory payroll Cash Goods in process inventory Factory payroll Factory overhead Factory payroll Factory Payroll 177, 000 26, 600 Ind. Labor 150, 400 DL Used Always 0 Debit 177, 000 Credit 177, 000 150, 400 26, 600 2 -28 Exercise 2 -9 page 70 Algorithm
Exercise 2 -10 page 70 2 -29
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% Prepare journal entries for the following events for the month of May. 1) Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts). 2) Application of overhead to goods in process. 2 -30 Exercise 2 -10 page 70
Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% Factory Overhead Ind. Mtls. 15, 000 Ind. Labor 80, 000 Other OH 120, 000 185, 500 OH applied Underapplied OH 29, 500 Factory Payroll 345, 000 80, 000 Ind. Labor 265, 000 DL Used Prepare journal entries for the following events for the month of May. 1) Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts). 2) Application of overhead to goods in process. 1) 2) General Journal Factory overhead Other accounts Debit 120, 000 Goods in process inventory ($265, 000 x 70%) Factory overhead 185, 500 Credit 120, 000 185, 500 2 -31 Exercise 2 -10 page 70
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost May 31 $38, 000 21, 600 34, 200 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% Prepare journal entries for the following events for the month of May. 1) Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts). 2) Application of overhead to goods in process. 2 -32 Exercise 2 -10 page 70 Algorithm
Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on DL cost May 31 $38, 000 21, 600 34, 200 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% Factory Overhead Ind. Mtls. 29, 600 Ind. Labor 26, 600 Other OH 41, 600 82, 720 OH applied Underapplied OH 15, 080 Factory Payroll 177, 000 26, 600 Ind. Labor 150, 400 DL Used Always 0 1) Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts). 2) Application of overhead to goods in process. 1) 2) General Journal Factory overhead Other accounts Goods in process inventory ($150, 400 DL x 55%) Factory overhead Debit 41, 600 Credit 41, 600 82, 720 2 -33 Exercise 2 -10 page 70 Algorithm
Exercise 2 -11 page 70 2 -34
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% Determine whethere is over or underapplied overhead using T-accounts. 2 -35 Exercise 2 -11 page 70
Inventories April 30 May 31 Raw materials $43, 000 $52, 000 Goods in process 10, 200 21, 300 Finished goods 63, 000 35, 600 Activities and information for May: Raw materials purchases (paid with cash) 210, 000 Factory payroll (paid with cash) 345, 000 Factory overhead Indirect materials 15, 000 Indirect labor 80, 000 Other overhead costs 120, 000 Sales (received in cash) 1, 400, 000 Predetermined overhead rate based on direct labor cost 70% General Journal Cost of Goods Sold Factory Overhead Ind. Mtls. 15, 000 Ind. Labor 80, 000 Other OH 120, 000 185, 500 OH applied Underapplied OH 29, 500 Factory Payroll 345, 000 80, 000 Ind. Labor 265, 000 DL Used Debit 29, 500 Credit 29, 500 2 -36 Exercise 2 -11 page 70
The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost May 31 $38, 000 21, 600 34, 200 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% Determine whethere is over or underapplied overhead using T-accounts. 2 -37 Exercise 2 -11 page 70 Algorithm
Inventories April 30 Raw materials $47, 000 Goods in process 10, 800 Finished goods 56, 000 Activities and information for May: Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on DL cost $150, 400 x 55% = $82, 720 OH applied General Journal Cost of Goods Sold Factory Overhead May 31 $38, 000 21, 600 34, 200 Factory Overhead Ind. Mtls. 29, 600 Ind. Labor 26, 600 Other OH 41, 600 82, 720 OH applied Underapplied OH 15, 080 197, 000 177, 000 29, 600 26, 600 41, 600 930, 000 55% Factory Payroll 177, 000 26, 600 Ind. Labor 150, 400 DL Used Always 0 Debit 15, 080 Credit 15, 080 2 -38 Exercise 2 -11 page 70 Algorithm
Exercise 2 -12 page 70 2 -39
Actual indirect materials costs Actual indirect labor costs Other overhead costs Overhead applied Marsh Concert Promotions $22, 000 46, 000 17, 000 88, 200 Ellis Home Builders $12, 500 46, 500 47, 000 105, 200 Determine whether overhead is overapplied or underapplied for Marsh Concert Promotions. Actual Ind. Mtls. Actual Ind. Lbr. Other OH costs Factory Overhead 22, 000 46, 000 17, 000 OH applied 88, 200 Overapplied OH 3, 200 General Journal Factory Overhead Cost of Goods Sold Debit 3, 200 Credit 3, 200 2 -40 Exercise 2 -12 page 70
Actual indirect materials costs Actual indirect labor costs Other overhead costs Overhead applied Marsh Concert Promotions $22, 000 46, 000 17, 000 88, 200 Ellis Home Builders $12, 500 46, 500 47, 000 105, 200 Determine whether overhead is overapplied or underapplied for Ellis Home Builders. Factory Overhead 12, 500 46, 500 47, 000 OH applied Underapplied OH 800 Actual Ind. Mtls. Actual Ind. Lbr. Other OH costs General Journal Cost of Goods Sold Factory Overhead 105, 200 Debit 800 Credit 800 2 -41 Exercise 2 -12 page 70
Actual indirect materials costs Actual indirect labor costs Other overhead costs Overhead applied Marsh Concert Ellis Home Promotions Builders $11, 600 $7, 300 55, 400 45, 600 17, 000 49, 900 91, 200 97, 500 Determine whether overhead is overapplied or underapplied for Marsh Concert Promotions. Factory Overhead Actual Ind. Mtls. 11, 600 Actual Ind. Lbr. 55, 400 Other OH costs 17, 000 OH applied Overapplied OH OH incurred 91, 200 7, 200 84, 000 General Journal Factory Overhead Cost of Goods Sold Debit 7, 200 Credit 7, 200 2 -42 Exercise 2 -12 page 70 Algorithm
Actual indirect materials costs Actual indirect labor costs Other overhead costs Overhead applied Marsh Concert Ellis Home Promotions Builders $11, 600 $7, 300 55, 400 45, 600 17, 000 49, 900 91, 200 97, 500 Determine whether overhead is overapplied or underapplied for Ellis Home Builders. Factory Overhead Actual Ind. Mtls. 7, 300 Actual Inc. Lbr. 45, 600 Other OH costs 49, 900 OH applied Underapplied OH 5, 300 OH incurred 97, 500 102, 800 General Journal Cost of Goods Sold Factory Overhead Debit 5, 300 Credit 5, 300 2 -43 Exercise 2 -12 page 70 Algorithm
Exercise 2 -13 page 70 2 -44
Prepare summary journal entries to record the following transactions and events a through h for a company in its first month of operations. a. Raw materials purchased on account, $90, 000. b. Direct materials used in production, $36, 500. Indirect materials used in production, $19, 200. c. Paid cash for factory payroll, $50, 000. Of this total, $38, 000 is for direct labor and $12, 000 is for indirect labor. d. Paid cash for other actual overhead costs, $11, 475. e. Applied overhead at the rate of 125 percent of direct labor cost. f. Transferred cost of jobs completed to finished goods, $56, 800. g. Sold jobs on account for $82, 000. The jobs had a cost of $56, 800. h. Close underapplied or overapplied overhead to cost of goods sold. 2 -45 Exercise 2 -13 page 70
a. Raw materials purchased on account, $90, 000. b. Direct materials used in production, $36, 500. Indirect materials used in production, $19, 200. c. Paid cash for factory payroll, $50, 000. Of this total, $38, 000 is for direct labor and $12, 000 is for indirect labor. d. Paid cash for other actual overhead costs, $11, 475. e. Applied overhead at the rate of 125 percent of direct labor cost. f. Transferred cost of jobs completed to finished goods, $56, 800. g. Sold jobs on account for $82, 000. The jobs had a cost of $56, 800. h. Close underapplied or overapplied overhead to cost of goods sold. General Journal a) b-1) b-2) c-1) c-2) c-3) d) Raw materials Accounts payable Debit 90, 000 Credit 90, 000 Goods in process inventory Raw materials 36, 500 Factory overhead Raw materials 19, 200 Factory payroll Cash 50, 000 Goods in process inventory Factory payroll 38, 000 Factory overhead Factory payroll 12, 000 Factory overhead Cash 11, 475 36, 500 19, 200 50, 000 38, 000 12, 000 11, 475 2 -46 Exercise 2 -13 page 70
a. Raw materials purchased on account, $90, 000. b. Direct materials used in production, $36, 500. Indirect materials used in production, $19, 200. c. Paid cash for factory payroll, $50, 000. Of this total, $38, 000 is for direct labor and $12, 000 is for indirect labor. d. Paid cash for other actual overhead costs, $11, 475. Factory Overhead e. Applied overhead at the rate of 125 percent of direct labor cost. Ind. Mtls. 19, 200 f. Transferred cost of jobs completed to finished goods, $56, 800. Ind. Lbr. 12, 000 g. Sold jobs on account for $82, 000. The jobs had a cost of $56, 800. Other OH 11, 475 h. Close underapplied or overapplied overhead to cost of goods sold. OH Applied 47, 500 Overapplied OH 4, 825 e) f) g) g-1) h) General Journal Goods in process inventory (125% of DL $38, 000) Factory overhead Debit 47, 500 Finished goods inventory Goods in process inventory 56, 800 Accounts receivable Sales 82, 000 Cost of goods sold Finished goods inventory 56, 800 Factory overhead Cost of goods sold Credit 56, 800 82, 000 56, 800 4, 825 2 -47 Exercise 2 -13 page 70
Prepare summary journal entries to record the following transactions and events a through h for a company in its first month of operations. a. Raw materials purchased on account, $96, 000. b. Direct materials used in production, $54, 000. Indirect materials used in production, $13, 000. c. Paid cash for factory payroll, $47, 000. Of this total, $38, 000 is for direct labor and $9, 000 is for indirect labor. d. Paid cash for other actual overhead costs, $19, 000. e. Applied overhead at the rate of 120 percent of direct labor cost. f. Transferred cost of jobs completed to finished goods, $123, 800. g. Sold jobs on account for $173, 000. The jobs had a cost of $123, 800. h. Close underapplied or overapplied overhead to cost of goods sold. 2 -48 Exercise 2 -13 page 70 Algorithm
a. Raw materials purchased on account, $96, 000. b. Direct materials used in production, $54, 000. Indirect materials used in production, $13, 000. c. Paid cash for factory payroll, $47, 000. Of this total, $38, 000 is for direct labor and $9, 000 is for indirect labor. d. Paid cash for other actual overhead costs, $19, 000. e. Applied overhead at the rate of 120 percent of direct labor cost. f. Transferred cost of jobs completed to finished goods, $123, 800. g. Sold jobs on account for $173, 000. The jobs had a cost of $123, 800. h. Close underapplied or overapplied overhead to cost of goods sold. General Journal a) b-1) b-2) c-1) c-2) c-3) Raw materials Accounts payable Debit 96, 000 Goods in process inventory Raw materials 54, 000 Factory overhead Raw materials 13, 000 Factory payroll Cash 47, 000 Goods in process inventory Factory payroll 38, 000 Factory overhead Factory payroll Credit 54, 000 13, 000 47, 000 38, 000 9, 000 2 -49 Exercise 2 -13 page 70 Algorithm
a. Raw materials purchased on account, $96, 000. b. Direct materials used in production, $54, 000. Indirect materials used in production, $13, 000. c. Paid cash for factory payroll, $47, 000. Of this total, $38, 000 is for direct labor and $9, 000 is for indirect labor. d. Paid cash for other actual overhead costs, $19, 000. e. Applied overhead at the rate of 120 percent of direct labor cost. f. Transferred cost of jobs completed to finished goods, $123, 800. g. Sold jobs on account for $173, 000. The jobs had a cost of $123, 800. h. Close underapplied or overapplied overhead to cost of goods sold. d) e) f) g) g-1) General Journal Factory overhead Cash Goods in process inventory Factory overhead Debit 19, 000 Credit 19, 000 45, 600 Finished goods inventory Goods in process inventory 123, 800 Accounts receivable Sales 173, 000 Cost of goods sold Finished goods inventory 123, 800 173, 000 123, 800 2 -50 Exercise 2 -13 page 70 Algorithm
a. Raw materials purchased on account, $96, 000. b. Direct materials used in production, $54, 000. Indirect materials used in production, $13, 000. c. Paid cash for factory payroll, $47, 000. Of this total, $38, 000 is for direct labor and $9, 000 is for indirect labor. d. Paid cash for other actual overhead costs, $19, 000. e. Applied overhead at the rate of 120 percent of direct labor cost. f. Transferred cost of jobs completed to finished goods, $123, 800. g. Sold jobs on account for $173, 000. The jobs had a cost of $123, 800. h. Close underapplied or overapplied overhead to cost of goods sold. Ind. Mtls. Ind. Lbr. Other OH h) Factory Overhead 13, 000 9, 000 19, 000 OH Applied Overapplied OH General Journal Factory overhead Cost of goods sold 45, 600 4, 600 Debit 4, 600 Credit 4, 600 2 -51 Exercise 2 -13 page 70 Algorithm
Exercise 2 -14 page 71 2 -52
In December 2012, Infovision established its predetermined overhead rate for movies produced during year 2013 by using the following cost predictions: overhead costs, $1, 680, 000, and direct labor costs, $480, 000. At year end 2013, the company’s records show that actual overhead costs for the year are $1, 652, 000. Actual direct labor cost had been assigned to jobs as follows. Movies completed and released $400, 000 Movies still in production 75, 000_ Total actual direct labor cost $475, 000 Determine the overhead rate used (based on direct labor cost). Overhead Costs Direct Labor cost $1, 680, 000 $480, 000 350% of Direct Labor cost Enter the overhead costs incurred and the amounts applied to movies during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied (and the amount) during the year. Factory Overhead 1, 652, 000 Actual OH OH Applied 1, 662, 500 ($475, 000 x 350%) Overapplied OH 10, 500 Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. General Journal Factory Overhead Cost of Goods Sold Exercise 2 -14 page 71 Debit 10, 500 Credit 10, 500 2 -53
In December 2012, Infovision established its predetermined overhead rate for movies produced during year 2013 by using the following cost predictions: overhead costs, $2, 592, 000, and direct labor costs, $480, 000. At year end 2013, the company’s records show that actual overhead costs for the year are $3, 560, 000. Actual direct labor cost had been assigned to jobs as follows. Movies completed and released Movies still in production Total actual direct labor cost $600, 000 72, 000 $672, 000 The predetermined overhead rate is based on budgeted costs and activities. Determine the overhead rate used (based on direct labor cost). Overhead Costs Direct Labor Cost $2, 592, 000 $480, 000 540% of Direct Labor cost Enter the overhead costs incurred and the amounts applied to movies during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied (and the amount) during the year. Factory Overhead 3, 560, 000 OH Applied Actual OH Exercise 2 -14 page 71 Algorithm 3, 628, 800 = $672, 000 Direct Labor x 540% Overapplied OH 68, 800 2 -54
In December 2012, Infovision established its predetermined overhead rate for movies produced during year 2013 by using the following cost predictions: overhead costs, $2, 592, 000, and direct labor costs, $480, 000. At year end 2013, the company’s records show that actual overhead costs for the year are $3, 560, 000. Actual direct labor cost had been assigned to jobs as follows. Movies completed and released Movies still in production Total actual direct labor cost $600, 000 72, 000 $672, 000 Overhead Costs Direct Labor Cost $2, 592, 000 $480, 000 Factory Overhead 3, 560, 000 OH Applied Actual OH 540% of Direct Labor cost 3, 628, 800 = $672, 000 Direct Labor x 540% Overapplied OH 68, 800 Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. General Journal Factory Overhead Cost of Goods Sold Debit 68, 800 Credit 68, 800 2 -55 Exercise 2 -14 page 71 Algorithm
Exercise 2 -15 page 71 2 -56
In December 2012, Cardozo Company established its predetermined overhead rate for jobs produced during year 2013 by using the following cost predictions: overhead costs, $750, 000, and direct labor costs, $625, 000. At year end 2013, the company’s records show that actual overhead costs for the year are $830, 000. Actual direct labor cost had been assigned to jobs as follows. Jobs completed and sold $513, 750 Jobs in finished goods inventory 102, 750 Jobs in goods in process 68, 500 Total actual direct labor cost $685, 000 Determine the overhead rate used (based on direct labor cost). Overhead Costs Direct Labor cost $750, 000 $625, 000 120% of Direct Labor cost Enter the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied (and the amount) during the year. Factory Overhead Actual OH Incurred 830, 000 Underapplied OH 8, 000 OH Applied 822, 000 ($685, 000 x 120%) Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. General Journal Cost of Goods Sold Factory Overhead Debit 8, 000 Credit 8, 000 2 -57 Exercise 2 -15 page 71
In December 2012, Cardozo Company established its predetermined overhead rate for jobs produced during year 2013 by using the following cost predictions: overhead costs, $1, 240, 000, and direct labor costs, $400, 000. At year end 2013, the company’s records show that actual overhead costs for the year are $1, 640, 000. Actual direct labor cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in goods in process Total actual direct labor cost $400, 000 78, 000 42, 000 $520, 000 x 310% = $1, 612, 000 applied Determine the overhead rate used (based on direct labor cost). The predetermined overhead rate is based on budgeted costs and activities. Overhead Costs Direct Labor cost $1, 240, 000 $400, 000 310% of Direct Labor cost Enter the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied (and the amount) during the year. Actual OH Factory Overhead 1, 640, 000 OH Applied Underapplied OH 28, 000 1, 612, 000 2 -58 Exercise 2 -15 page 71 Algorithm
In December 2012, Cardozo Company established its predetermined overhead rate for jobs produced during year 2013 by using the following cost predictions: overhead costs, $1, 240, 000, and direct labor costs, $400, 000. At year end 2013, the company’s records show that actual overhead costs for the year are $1, 640, 000. Actual direct labor cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in goods in process Total actual direct labor cost $400, 000 78, 000 42, 000 $520, 000 x 310% = $1, 612, 000 applied Overhead Costs Direct Labor cost Actual OH $1, 240, 000 $400, 000 310% of Direct Labor cost Factory Overhead 1, 640, 000 OH Applied Underapplied OH 28, 000 1, 612, 000 Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. General Journal Cost of Goods Sold Factory Overhead Debit 28, 000 Credit 28, 000 2 -59 Exercise 2 -15 page 71 Algorithm
Exercise 2 -17 page 71 2 -60
Deschamps Company’s ending Goods in Process Inventory account consists of 5, 000 units of partially completed product, and its Finished Goods Inventory account consists of 12, 000 units of product. The factory manager determines that Goods in Process Inventory includes direct materials cost of $10. 00 per unit and direct labor cost of $7. 00 per unit. Finished goods are estimated to have $12. 00 of direct materials cost per unit and $9. 00 of direct labor cost per unit. The company established the predetermined overhead rate using the following predictions: estimated direct labor cost, $300, 000, and estimated factory overhead, $375, 000. The company allocates factory overhead to its goods in process and finished goods inventories based on direct labor cost. During the period, the company incurred these costs: direct materials, $535, 000; direct labor, $290, 000; and factory overhead applied, $362, 500. 1. Determine the overhead rate used (based on direct labor cost). Overhead Costs Direct Labor Cost $375, 000 $300, 000 125% of Direct Labor Cost 2. Compute the total cost of the two ending inventories. Direct materials Direct labor Overhead applied Goods in Process Finished Goods Cost per unit Units Amount $10. 00 5, 000 $50, 000 $12. 00 12, 000 $144, 000 7. 00 5, 000 35, 000 9. 00 12, 000 108, 000 8. 75 5, 000 43, 750 11. 25 12, 000 135, 000 $25. 75 $128, 750 $32. 25 $387, 000 2 -61 Exercise 2 -17 page 71
Deschamps Company’s ending Goods in Process Inventory account consists of 5, 000 units of partially completed product, and its Finished Goods Inventory account consists of 12, 000 units of product. The factory manager determines that Goods in Process Inventory includes direct materials cost of $10. 00 per unit and direct labor cost of $7. 00 per unit. Finished goods are estimated to have $12. 00 of direct materials cost per unit and $9. 00 of direct labor cost per unit. The company established the predetermined overhead rate using the following predictions: estimated direct labor cost, $300, 000, and estimated factory overhead, $375, 000. The company allocates factory overhead to its goods in process and finished goods inventories based on direct labor cost. During the period, the company incurred these costs: direct materials, $535, 000; direct labor, $290, 000; and factory overhead applied, $362, 500. 3. Compute cost of goods sold for the year (assume no beginning inventories and no underapplied or overapplied overhead). Beginning GIP Direct materials Direct labor Overhead applied Ending GIP Beginning FG Cost of goods manuf. Goods in Process (GIP) 0 535, 000 290, 000 362, 500 Cost of goods manuf. 128, 750 Finished Goods (FG) 0 1, 058, 750 Cost of goods sold Ending GIP 1, 058, 750 671, 750 387, 000 2 -62 Exercise 2 -17 page 71
Deschamps Company’s ending Goods in Process Inventory account consists of 6, 100 units of partially completed product, and its Finished Goods Inventory account consists of 13, 100 units of product. The factory manager determines that Goods in Process Inventory includes direct materials cost of $11. 10 per unit and direct labor cost of $8. 20 per unit. Finished goods are estimated to have $13. 10 of direct materials cost per unit and $10. 20 of direct labor cost per unit. The company established the predetermined overhead rate using the following predictions: estimated direct labor cost, $410, 000, and estimated factory overhead, $512, 500. The company allocates factory overhead to its goods in process and finished goods inventories based on direct labor cost. During the period, the company incurred these costs: direct materials, $645, 000; direct labor, $400, 000; and factory overhead applied, $500, 000. The predetermined overhead rate is based on budgeted costs and activities. 1. Determine the overhead rate used (based on direct labor cost). Budgeted Overhead Costs $512, 500 Budgeted Direct Labor Cost $410, 000 125% of Direct Labor Cost 2. Compute the total cost of the two ending inventories. Direct materials Direct labor Overhead applied Goods in Process Finished Goods Cost per unit Units Amount $11. 10 6, 100 $67, 710 $13. 10 13, 100 $171, 610 8. 20 6, 100 50, 020 10. 20 13, 100 133, 620 10. 25 6, 100 62, 525 12. 75 13, 100 167, 025 $29. 55 $180, 255 $36. 05 $472, 255 2 -63 Exercise 2 -17 page 71 Algorithm
During the period, the company incurred these costs: direct materials, $645, 000; direct labor, $400, 000; and factory overhead applied, $500, 000. Direct materials Direct labor Overhead applied Goods in Process Finished Goods Cost per unit Units Amount $11. 10 6, 100 $67, 710 $13. 10 13, 100 $171, 610 8. 20 6, 100 50, 020 10. 20 13, 100 133, 620 10. 25 6, 100 62, 525 12. 75 13, 100 167, 025 $29. 55 $180, 255 $36. 05 $472, 255 3. Compute cost of goods sold for the year (assume no beginning inventories and no underapplied or overapplied overhead). 2 -64 Exercise 2 -17 page 71 Algorithm
During the period, the company incurred these costs: direct materials, $645, 000; direct labor, $400, 000; and factory overhead applied, $500, 000. Direct materials Direct labor Overhead applied Goods in Process Finished Goods Cost per unit Units Amount $11. 10 6, 100 $67, 710 $13. 10 13, 100 $171, 610 8. 20 6, 100 50, 020 10. 20 13, 100 133, 620 10. 25 6, 100 62, 525 12. 75 13, 100 167, 025 $29. 55 $180, 255 $36. 05 $472, 255 Ending GIP Goods in Process (GIP) 0 645, 000 400, 000 500, 000 Cost of goods manuf. 180, 255 Beginning FG Cost of goods manuf. Finished Goods (FG) 0 1, 364, 745 Beginning GIP Direct materials Direct labor Overhead applied Cost of goods sold Ending GIP 1, 364, 745 892, 490 472, 255 2 -65 Exercise 2 -17 page 71 Algorithm
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