Sheffield, Inc. manufactures ergonomically designed computer
furniture. Sheffield uses a job order costing system. On November
30, the Work in Process Inventory consisted of the following
jobs:
Job No. | Item | Units | Accumulated Cost | ||||||
---|---|---|---|---|---|---|---|---|---|
CC723 | Computer caddy | 25,000 | $960,000 | ||||||
CH291 | Chair | 18,000 | 433,000 | ||||||
PS812 | Printer stand | 26,000 | 300,000 | ||||||
$1,693,000 |
On November 30, Sheffield’s Raw Materials Inventory account totaled
$697,000, and its Finished Goods Inventory totaled $3,476,400.
Sheffield applies manufacturing overhead on the basis of machine
hours. The company’s manufacturing overhead budget for the year
totaled $5,000,000, and the company planned to use 1,000,000
machine hours during the year. Through the first eleven months of
the year, the company used a total of 850,000 machine hours, total
manufacturing overhead amounted to $4,284,500, and Cost of Goods
Sold was $8,760,250. For the pursposes of this problem, ignore
year-end disposition of over / under applied overhead.
Sheffield purchased $648,000 in raw materials in December and
incurred the following costs for jobs in process that
month:
Job No. | Materials Issued |
Machine Hours |
Direct Labor Hours |
Direct Labor Cost |
|||||
---|---|---|---|---|---|---|---|---|---|
CC723 | $192,000 | 13,000 | 13,200 | $122,400 | |||||
CH291 | $18,500 | 4,600 | 4,000 | $47,200 | |||||
PS812 | $247,000 | 22,000 | 14,300 | $225,500 | |||||
DS444 | $260,000 | 17,000 | 16,900 | $138,000 |
The following jobs were completed in December and transferred to
the Finished Goods Inventory:
Job No. | Item | Units | |||
---|---|---|---|---|---|
CC723 | Computer caddy | 25,000 | |||
CH291 | Chair | 18,000 | |||
DS444 | Desk | 9,000 |
(a) | Calculate the total cost of each of the four jobs worked on in December. | ||||||||||||||||||
|
(b) | Calculate the total manufacturing cost for December. | |||
|
(c) | Calculate the cost of goods manufactured for December. | |||
|
(d) | Calculate the balance in the Work in Process Inventory account on December 31. | |||
|
(e) | Assume that Sheffield sold 15,000 computer caddies, 12,000
chairs, and 4,500 desks in December. Calculate Cost of Goods Sold
for the month of December and the ending Finished Goods Inventory balance on December 31. (For computation purpose round per unit rates to 2 decimal places, e.g. 3.54. Round final answers to 0 decmial places, e.g. 45,000.) |
||||||
|
Overhead rate = $5,000,000 / 1,000,000 = $5 per machine hour
(a)
CC723 | CH291 | PS812 | DS444 | Total | |
Beginning Cost | $ 960,000 | $ 433,000 | $ 300,000 | $ 1,693,000 | |
Direct Materials | $ 192,000 | $ 18,500 | $ 247,000 | $ 260,000 | $ 717,500 |
Direct Labor | $ 122,400 | $ 47,200 | $ 225,500 | $ 138,000 | $ 533,100 |
Overhead | $ 65,000 | $ 23,000 | $ 110,000 | $ 85,000 | $ 283,000 |
Total Cost | $ 1,339,400 | $ 521,700 | $ 882,500 | $ 483,000 | $ 3,226,600 |
(b)
Direct Materials used | $ 717,500 |
Direct Labor | $ 533,100 |
Overhead | $ 283,000 |
Total Manufacturing Costs | $ 1,533,600 |
(c) Cost of Goods Manufactured -
CC723 | CH291 | DS444 | Total | |
Beginning Cost | $ 960,000 | $ 433,000 | ||
Direct Materials | $ 192,000 | $ 18,500 | $ 260,000 | |
Direct Labor | $ 122,400 | $ 47,200 | $ 138,000 | |
Overhead | $ 65,000 | $ 23,000 | $ 85,000 | |
Cost of Goods Manufactured | $ 1,339,400 | $ 521,700 | $ 483,000 | $ 2,344,100 |
(d) Balance in the Work in Process Inventory account on December 31 = $882500 i.e. for Job PS812
(e)
CC723 | CH291 | DS444 | Total | |
Beginning Cost | $ 960,000 | $ 433,000 | ||
Direct Materials | $ 192,000 | $ 18,500 | $ 260,000 | |
Direct Labor | $ 122,400 | $ 47,200 | $ 138,000 | |
Overhead | $ 65,000 | $ 23,000 | $ 85,000 | |
Cost of Goods Manufactured | $ 1,339,400 | $ 521,700 | $ 483,000 | $ 2,344,100 |
Units produced | 25000 | 18000 | 9000 | |
Cost per unit | $ 53.58 | $ 28.98 | $ 53.67 | |
Units sold | 15000 | 12000 | 4500 | |
Cost of Goods Sold | $ 803,640 | $ 347,800 | $ 241,500 | $ 1,392,940 |
Finished Inventory | $ 535,760 | $ 173,900 | $ 241,500 | $ 951,160 |
Sheffield, Inc. manufactures ergonomically designed computer furniture. Sheffield uses a job order costing system. On November...
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