Question

* More Info a. Purchased materials on account, $460,000 Incurred total manufacturing wages of $112.000, which included both direct labor and indirect labor. Used direct labor in manufacturing as follows: Direct Labor Requirements Chalet 13 .........$ 14,100 Chalet 14...........$ 28,100 Chalet 15........... $ 19,300 1. Record the preceding events in the general journal. Chalet 16. 2. Post the appropriate entries to the T-accounts, identifying each entry by letter. Determine the ending ..........$ 21,500 account balances, assuming that the beginning balances were zero. c. Requisitioned direct materials in manufacturing as follows: 3. Summarize the job costs of the unfinished chalet and show that this equals the ending balance in Direct Materials Work in Process Inventory. 4. Summarize the job cost of the completed chalet that has not yet been sold and show that this equals Chalet 13............ $ 41,300 the ending balance in Finished Goods Inventory. Chalet 14...................... 56,800 5. Compute the gross profit on each chalet that was sold. What costs must the gross profit cover for Memory Homes? Chalet 15. ......... 62,500 Chalet 16............ $ 66,000 Depreciation of manufacturing equipment used on different chalets, $6,600. Print Done e. Other overhead costs incurred on Chalets 13–16: Equipment rentals paid in cash .....$ 10,700 Prepaid plant insurance expired.....$ 7,000 f. Allocated overhead to jobs at the predetermined rate of 60% of direct labor cost. g. Chalets completed: 13, 15, and 16. h. Chalets sold on account: 13 for $96,000 and 16 for $140,000 Print Done] Print Done

Answer 1

1	Entries	Description					Debit	Credit
	a.	Raw materials					460000
		Accounts payable						460000
		(Materials purchased on account)
	b.	Work in process		(14100+28100+19300+21500)			83000
		Manufacturing overhead			(112000-83000)		29000
		Wages payable						112000
		(Manufacturing wages used)
	c.	Work in process		(41300+56800+62500+66000)			226600
		Raw materials inventory						226600
		(Materials requisitioned)
	d.	Manufacturing overhead					6600
		Accumulated depreciation						6600
		(Depreciation recorded)
	e.	Manufacturing overhead					17700
		Cash						10700
		Prepaid insurance						7000
		(Other overhead costs incurred)
	f.	Work in process				(83000*60%)	49800
		Manufacturing overhead						49800
		(manufacturing overhead applied)
	g.	Finished goods				(Note:1)	257640
		Work in process						257640
		(Completed jobs transferred to finished goods)
	h. Sale	Accounts receivable			(96000+140000)		236000
		Sales revenue						236000
		(Chalets sold on account)
	h. Cost	Cost of goods sold			(63860+100400)		164260
		Finished goods						164260
		(Cost of jobs sold recorded)
	Note:1
	Chalet	Direct materials	Direct labor	Factory overhead	Total
		a	b	c=b*60%	a+b+c
	13	41300	14100	8460	63860
	15	62500	19300	11580	93380
	16	66000	21500	12900	100400
	Total				257640
2		Work in process inventory
	b.	83000	g.	257640
	c.	226600
	f.	49800
		359400		257640
	Bal.	101760
		Finished goods inventory
	g.	257640	h.	164260
		257640		164260
	Bal.	93380
3	Reconciliation of work in process inventory subsidiary and control accounts
						$
	Work in process inventory balance					101760
	Unfinished chalet: (Chalet 14)
	Direct materials					56800
	Direct labor					28100
	Manufacturing overhead			(28100*60%)		16860
	Total cost equals work in process balance					101760
4	Reconciliation of finished goods inventory subsidiary and control accounts
						$
	Finished goods inventory balance					93380
	Completed,unsold chalet:			(Chalet 15)
	Direct materials					62500
	Direct labor					19300
	Manufacturing overhead			(19300*60%)		11580
	Total cost equals finished goods balance					93380
5	The gross profit must cover these type of costs:
	Direct materials
	Direct labor
	Manufacturing overhead
		Gross profit on Chalets sold in May
						Chalet 13	Chalet 16
	Sales revenue					96000	140000
	Less: Cost of chalets sold					63860	100400
	Gross profit					32140	39600
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