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	33,000	June 30	Requisitions	(A)
June 30	Purchases	132,700

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	125,000

Factory Overhead
June 1	Balance	21,000	June 30	Factory overhead applied	(E)
June 30	Indirect labor	(H)
June 30	Indirect materials	17,700
June 30	Other overhead	89,800

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	190			$20,020				$14,000
202		T200	390			36,950				25,000
203		T400	210			14,880				9,000
204		S200	310			41,210				32,000
205		T300	180			22,660				17,000
206		S100	100			5,500				3,000
		Total	1,380			$141,220				$100,000

b. Factory overhead is applied to each job at a rate of 150% 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	$5,400
202	T200	15,600
Total		$21,000

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	152
202	T200	X	312
203	T400		0
204	S200	X	260
205	T300	X	149
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		$ 5,400		$ 20,020		$ 14,000		$		$		$				$
No. 202		15,600		36,950		25,000
No. 203				14,880		9,000
No. 204				41,210		32,000
No. 205				22,660		17,000
No. 206				5,500		3,000
Total		$21,000		141,220		100,000		$		$						$

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

1.

Job No.	Quantity	June 1 Work in Process	Direct Material	Direct labor	Factory Overhead	Total	Cost per unit	Units Sold	Cost of Goods Sold
201	190	$            5,400	$           20,020	$           14,000	$           21,000	$          60,420	$          318.00	152	$          48,336
202	390	$          15,600	$           36,950	$           25,000	$           37,500	$       115,050	$          295.00	312	$          92,040
203	210		$           14,880	$             9,000	$           13,500	$          37,380			$          26,700
204	310		$           41,210	$           32,000	$           48,000	$       121,210	$          391.00	260	$        101,660
205	180		$           22,660	$           17,000	$           25,500	$          65,160	$          362.00	149	$          53,938
206	100		$             5,500	$             3,000	$             4,500	$          13,000
Totals	1380	$          21,000	$         141,220	$         100,000	$         150,000	$       412,220			$        322,674

a. Materials Requisitions = $141220+17700 = $158920

b. Work in Process Beginning Balance = $21000

c. Direct Materials = $141220

d. Direct Labor = $100000

e. Factory overhead applied = $150000

f. Completed jobs = $60420+115050+121210+65160 = $361840

g. Cost of goods sold = $322674

h. Indirect labor = $125000-100000 = $25000

2.
Material = $33000+132700-158920 = $6780
Work in Process = $37380+13000 = $50380
Finished Goods = $361840-322674 = $39166
Factory Overhead = $17700+25000+21000+89800-150000 = $3500