Question

4-29 Job costing, journal entries. The University of Chicago Press is wholly owned by the university. It performs the bulk of its work for other university departments, which pay as though the press were an outside business enterprise. The press also publishes and maintains a stock of books for general sale. The press uses normal costing to cost each job. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead, allocated on the basis of direct manufacturing labor costs).

Answer 1

1.

Indirect cost pool Manufacturing Overhead Costs Cost Allocation Base Direct Manufacturing Labor costs Cost Object: Print jobs Direct Materials + Direct Mfg. Labor + MOH Direct Costs Direct Materials costs Direct Manufacturing Labor costs

2.

No	Account Titles	Debit	Credit
1	Materials control	800
	Accounts payable/Cash		800
2	Work in process control	710
	Materials control		710
3	Manufacturing overhead control	100
	Materials control		100
4	Work in process control	1300
	Wages payable/Cash		1300
5	Manufacturing overhead control	900
	Wages payable/Cash		900
6	Manufacturing overhead control	400
	Accumulated depreciation-building and manufacturing equip.		400
7	Manufacturing overhead control	550
	Cash/Accounts payable		550
8	Work in process control	2080
	Manufacturing overhead allocated (160% x $1300)		2080
9	Finished goods control	4120
	Work in process control		4120
10	Cash/Accounts receivable	8000
	Sales revenue		8000
11	Cost of goods sold	4020
	Finished goods control		4020
12	Manufacturing overhead allocated	2080
	Manufacturing overhead control		1950
	Cost of goods sold		130

Note: The transactions have been recorded and numbered in the order given in the question.

3.

Materials Control
Beg. Bal.	100
1	800	710	2
		100	3
End. Bal.	90
Work in Process Control
Beg. Bal.	60
2	710	4120	9
4	1300
8	2080
End. Bal.	30
Finished Goods Control
Beg. Bal.	500
9	4120	4060	11
End. Bal.	560
Cost of Goods Sold
11	4020	130	12
End. Bal.	3890
Manufacturing Overhead Control
3	100	1950	12
5	900
6	400
7	550
End. Bal.	0
Manufacturing Overhead Allocated
12	2080	2080	8
End. Bal.		0

4. Gross profit = Sales revenue - Adjusted cost of goods sold = $8000 - $3890 = $4110

The University of Chicago Press performed well in 2017 as it had a gross profit of $4110