Question

Analyzing Manufacturing Cost Accounts

Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for June:

Materials
June 1	Balance	26,300	June 30	Requisitions	(A)
June 30	Purchases	105,700

Work in Process
June 1	Balance	(B)	June 30	Completed jobs	(F)
June 30	Materials	(C)
June 30	Direct labor	(D)
June 30	Factory overhead applied	(E)

Finished Goods
June 1	Balance	0	June 30	Cost of goods sold	(G)
June 30	Completed jobs	(F)

Wages Payable
			June 30	Wages incurred	112,500

Factory Overhead
June 1	Balance	21,300	June 30	Factory overhead applied	(E)
June 30	Indirect labor	(H)
June 30	Indirect materials	14,100
June 30	Other overhead	98,900

In addition, the following information is available:

a. Materials and direct labor were applied to six jobs in July:

Job No.		Style	Quantity		Direct Materials				Direct Labor
201		T100	180			$18,100				$13,000
202		T200	400			31,800				26,000
203		T400	170			11,360				7,000
204		S200	250			27,000				25,000
205		T300	170			18,170				16,000
206		S100	100			6,000				3,000
		Total	1,270			$112,430				$90,000

b. Factory overhead is applied to each job at a rate of 170% of direct labor cost.

c. The June 1 Work in Process balance consisted of two jobs, as follows:

Job No.	Style	Work in Process, June 1
201	T100	$5,300
202	T200	16,000
Total		$21,300

d. Customer jobs completed and units sold in July were as follows:

Job No.	Style	Completed in July	Units Sold in July
201	T100	X	144
202	T200	X	320
203	T400		0
204	S200	X	210
205	T300	X	141
206	S100		0

1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers.

Job No.	Quantity	June 1 Work in Process		Direct Materials		Direct Labor		Factory Overhead		Total Cost		Unit Cost		Units Sold	Cost of Goods Sold
No. 201		$ 5,300		$ 18,100		$ 13,000		$		$		$				$
No. 202		16,000		31,800		26,000
No. 203				11,360		7,000
No. 204				27,000		25,000
No. 205				18,170		16,000
No. 206				6,000		3,000
Total		$21,300		112,430		90,000		$		$						$

a. Materials Requisitions $

b. Work in Process Beginning Balance $

c. Direct Materials $

d. Direct Labor $

e. Factory overhead applied $

f. Completed jobs $

g. Cost of goods sold $

h. Indirect labor $

2. Determine the June 30 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.

Materials:	$
Work in Process:	$
Finished Goods:	$
Factory Overhead:	$

Answer 1

Job no	Quantity	June 1, Work in process	Direct materials	Direct labor	Factory overhead (170%*Direct labor)	Total cost	Unit cost	Units sold	Cost of goods sold
No.201	180	$5,300	$18,100	$13,000	$22,100	$58,500	$325	144	$46,800
No.202	400	16,000	31,800	26,000	44,200	118,000	295	320	94,400
No.203	170		11,360	7,000	11,900	30,260	178
No.204	250		27,000	25,000	42,500	94,500	378	210	79,380
No.205	170		18,170	16,000	27,200	61,370	361	141	50,901
No.206	100		6,000	3,000	5,100	14,100	141
Total	1,270	$21,300	$112,430	$90,000	$153,000	$376,730			$271,481

a. Material requisition = $112,430 (Direct material) + 14,100 (Indirect material) = $126,530

b. Work in process beginning balance = $21,300

c. Direct materials = $112,430

d. Direct labor = $90,000

e. Factory overhead applied = $153,000

f. Completed jobs = $58,500 (Job 201)+118,000(Job 202)+94,500(Job 204)+61,370(Job 205) = $332,370

g. Cost of goods sold = $271,481

h. Indirect labor = $112,500 - 90,000 = $22,500

2.

Materials	$5,470 ($26,300+105,700-126,530)
Work in process	44,360 ($30,260+14,100)
Finished goods	60,889 ($332,370-271,481)
Factory overhead	18,700 ($153,000-21,300-14,100-98,900)