Question

QUESTION 1 Step 1 You work for Thunderduck Custom Tables Inc. This is the first month of operations. The company designs and manufactures the customer. This month, you have been asked to develop and manufacture two new tables for customers. You will design and build the tables. This is a no nail, no screw, and no glue manufacturing (no indirect materials used). You will be keeping track of the costs incurred to manufacture the tables using Job #1 Cost Sheet and Job #2 Cost Sheet. The cost of the direct materials that can be used to manufacture the table are as follows. These cost are on a per unit basis. Table Top $1,600.00 Table Leg $450.00 Drawer $360.00 The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours. The company estimates that there will be 12 direct labor hours worked during the month. The estimated manufacturing overhead cost for the month is: a. Factory supervisor salary per month b. Rent for the factory per month C. Depreciation of factory equipment per month Total Estimated manufacturing overhead $3,000.00 $1,200.00 $600.00 $4,800.00 What is the predetermined manufacturing overhead rate? 400 Step 2 Step 3 The first order you received was to manufacture a table using a table top and four legs. This is your Job #1. The customer that has ordered Job #2, wants a table that is the same as Job #1, but wants to also add a drawer to the table. Step 4 The following is a list of transactions that need to be recorded for the company for activity in the month of December. Record those in the "General Journal" tab of the excel file using the proper format. Please use the following accounts: Accounts Receivables, Raw materials, Work in process, Finished goods, Accumulated depreciation, Accounts payable, Salaries and wages payable, Sales revenue, Manufacturing overhead, Cost of goods sold, Salaries and wages expense, Advertising expenses, and Depreciation expense. 1-Dec Raw Materials purchased on account, $16,000. 5-Dec All Raw Materials needed for Job #1 were requisitioned from the material storage for use during the month. Assume all materials are direct. (After you journalize this entry please enter the information into Job #1 Cost Sheet) 10-Dec The following employee costs were incurred but not paid during the month:
Please help me!! thank you!

Answer 1

Solutions:

Journal Entries - ThunderDuck Custom tables Inc,
Date	Particulars	Debit	Credit
1-Dec	Raw Materials	16000
	Accounts Payable		16000
	(Purchased Raw materials on account)
5-Dec	Work In Process	3400
	Raw Materials		3400
	( Materials Required for Job 1 Requisitioned)
10-Dec	Work in Process	180
	Manufacturing Overhead	3500
	Salaries amd Wages Expense	2000
	Salaries and Wages Payable		5680
	(To record Employee Costs incurred 3 employees*2 hours @ $30 per hour totalling to $180 and Factory supervisors salary and administrative Salary Expense))
15-Dec	Work In Process	3760
	Raw Materials		3760
	( Materials Required for Job 2 Requisitioned)
16-Dec	Manufacturing Overhead	1200
	Accounts Payable		1200
	(To record the factory rent)
17-Dec	Advertising Expense	1200
	Accounts Payable		1200
	( To record advertising expenses incurred but not paid)
20-Dec	Depreciation Expense	600
	Manufacturing Overehead	150
	Accumulated Depreciation		750
	(To Record depreciation expense on factory and selling and administrative expense)
22-Dec	Work in Process	2400
	Manufacturing Overhead		2400
	(Manufacturing overhead applied @ 6 hours * 400 per hour)
26-Dec	Finished Goods	5980
	Work in Process		5980
	(To record completeion of Job#1 )
28-Dec	Cost of Goods sold	5980
	Finished Inventory		5980
	(To record cost of goods sold to finished goods inventory)
	Accounts Receivable	21000
	Sales Revenue		21000
	(Sold Completed table to customer)
31-Dec	Work In Process	90
	Salaries and Wages Payable		90
	(To record Employee Costs incurred 3 employees*1 hours @ $30 per hour totalling to $60)
31-Dec	Work in Process	1200
	Manufacturing Overhead		1200
	(Manufacturing overhead applied @ 3 hours * 400 per hour)
31-Dec	Cost of Goods Sold	1250
	Manufacturing Overhead		1250
	(Underapplied overhead closed to cost of goods sold)

T - Accounts

Raw Materials				Accounts payable
	-
1-Dec	16000	5-Dec	3400			1-Dec	16000
		15-Dec	3760			16-Dec	1200
						17-Dec	1200
Bal	8840					Balance	18400

Work In Process				Manufacturing Overheads
5-Dec	3400	26-Dec	5980
10-Dec	180			10-Dec	3500	22-Dec	2400
15-Dec	3760			16-Dec	1200	31-Dec	1200
22-Dec	2400			20-Dec	150	31-Dec	1250
31-Dec	90
31-Dec	1200
Bal	5050

Salaries Expense				Salaries and Wages Payable
10-Dec	2000					10-Dec	180
Bal	2000					10-Dec	3500
						10-Dec	2000
						31-Dec	90
						Balance	5770

Accumulated Depreciation				Depreciation Expense
		20-Dec	150	20-Dec	600
		20-Dec	600	Balance	600
		Balance	750

Accounts Receivable				Sales Revenue
28-Dec	21000					28-Dec	21000
Bal	21000					Bal	21000

Finished Goods				Cost of Goods Sold
26-Dec	5980	26-Dec	5980	26-Dec	5980
				31-Dec	1250

Advertising Expense
17-Dec	1200
Bal	1200

ThunderDuck Custom tables Inc,
Cost of Goods Manufactured Schedule
For the Month Ended December 31
Work in process Dec 01		0
Direct materials used	$7,160
Direct labor	270
Manufacturing overhead applied	3,600
Total manufacturing costs	$11,030	$11,030
Total cost of work in process		$11,030
Less: Work in process, Dec 31		$5,050
Cost of goods manufactured		$5,980

Cost of Goods Sold Schedule
Finished goods, May 1		0
Cost of goods manufactured		5,980
Cost of goods available for sale		5,980
Finished goods, May 31		0
Cost of goods sold (Unadjusted)		5,980
Add: Underapplied Overhead		$1,250
Adjusted Cost of Goods Sold		$7,230

Income Statement
Sales		21000
Less: Cost of goods sold		$7,230
Gross Profit		$13,770
Less: Operating Expenses
Salaries	2000
Deprecication	600
Advertising Expense	1200
Total Operating Expenses		3800
Net Operating Income		$9,970