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	37,400	June 30	Requisitions	(A)
June 30	Purchases	150,100

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	123,800

Factory Overhead
June 1	Balance	22,400	June 30	Factory overhead applied	(E)
June 30	Indirect labor	(H)
June 30	Indirect materials	20,000
June 30	Other overhead	64,000

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	220			$26,780				$17,000
202		T200	390			40,910				26,000
203		T400	220			18,240				9,000
204		S200	280			45,020				29,000
205		T300	160			22,780				15,000
206		S100	100			5,900				3,000
		Total	1,370			$159,630				$99,000

b. Factory overhead is applied to each job at a rate of 130% 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	$6,500
202	T200	15,900
Total		$22,400

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	176
202	T200	X	312
203	T400		0
204	S200	X	235
205	T300	X	133
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		$ 6,500		$ 26,780		$ 17,000		$		$		$				$
No. 202		15,900		40,910		26,000
No. 203				18,240		9,000
No. 204				45,020		29,000
No. 205				22,780		15,000
No. 206				5,900		3,000
Total		$22,400		159,630		99,000		$		$						$

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:	$

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Answer 1

Answer 1

Job No.	Quantity (1)	June 1 Work in Process (2)	Direct Material (3)	Direct Labour (4)	Factory Overhead (5)	Total cost (6) = (2+3+4+5)	Unit cost (7) = (6/1)	Unit sold (8)	Cost of goods sold (for point g) = (7*8)
No. 201	220	$6500	$26780	$17000	$22100	$72380	$329	176	$57904
No. 202	390	$15900	$40910	$26000	$33800	$116610	$299	312	$93288
No. 203	220		$18240	$9000	$11700	$38940		0	0
No. 204	280		$45020	$29000	$37700	$111720	$399	235	$93765
No. 205	160		$22780	$15000	$19500	$57280	$358	133	$47614
No. 206	100		$5900	$3000	$3900	$12800		0	0
Total	1370	$22400	$159630	$99000	$128700	$409730			$292571

a) Material Requisitions (Material applied + Indirect Material) - $179630 ($159630 + $20000)

b) work in process beginning balance - $22400 ( from table)

c) Direct Material - $159630 (from table)

d) Direct Labour - $99000 (from table)

e) Factory overhead applied - $128700 (from table)

f) completed Jobs - $357990 ($72380 + $116610 + $111720 + $57280)

g) cost of goods sold - $292571 (from table)

h) Indirect Labour - (Labour incurred - labour applied) - $24800 ($123800 - $99000)

Answer 2

Materials ($37400 + $150100 - $179630)	$7870
Work in process ($409730 - $357990)	$51740
Finished goods ($357990 - $292571)	$65419
Factory overhead ($22400 + $24800 + $20000 + $64000 - $128700)	$2500 underapplied