Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 2, Problem 10P
1.
To determine
Journalize the transactions and provide impact of each transaction in a table format.
2.
To determine
Compute the material inventory balance and the cost of material used in production.
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The following transactions were incurred by Mooney Fabricators during January, the first month of its fiscal year.
(Click the icon to view the transactions.)
Requirements
1. Record the proper journal entry for each transaction.
2. By the end of January, was manufacturing overhead overallocated or underallocated? By how much?
Date
TWIT
b. $178,000 of materials was used in production; of this amount, $146,000
Journal Entry
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Accounts
b. Work in Process Inventory
Manufacturing Overhead
Raw Materials Inventory
Debit
More info
a. $205,000 of materials was purchased on account.
b. $178,000 of materials was used in production; of this amount, $146,000 was
used on specific jobs.
C. Manufacturing labor and salaries for the month totaled $225,000. A total of
$215,000 of manufacturing labor and salaries was traced to specific jobs, and
the remainder was indirect labor used in the factory.
d.
e.
f.
The company recorded $24,000 of depreciation on the plant and plant
equipment. The…
Columbine
Company makes artificial flowers and reports the following data for the month:
Journalize the entries relating to materials and labor. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Purchases of materials, on account
$48,000
Materials requisitions:
Direct materials
39,500
Indirect materials
300
Labor incurred (not yet paid):
Direct labor
27,600
Indirect labor
1,940
During January, Dream House Builders, Inc. incurred $550 of actual indirect materials costs, as supported by materials requisitions. Complete the following journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Chapter 2 Solutions
Principles of Cost Accounting
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- Puddleby Company had the following transactions in October: (Click the icon to view the transactions.) Prepare the journal entries for Puddleby Company. (Record debits first, then credits. Exclude explanations from any journal entries.) 1. Purchased raw materials on account, $75,000 Used materials in production: $28,000 in the Mixing Department; $7,000 in the Packaging 2. Department; $1,100 in indirect materials Incurred labor costs: $8,500 in the Mixing Department; $5,600 in the Packaging 3. Department; $2,400 in indirect labor Incurred manufacturing overhead costs: $5,500 in machinery depreciation; paid $3,000 for 4. rent and $1,750 for utilities 1. Purchased raw materials on account, $75,000 Date Accounts Debit Creditarrow_forwardThe following transactions were incurred by Augustine Fabricators during January, the first month of its fiscal year. Requirements: Record the proper journal entry for each transaction. $205,000 of materials was purchased on account. $158,000 of materials was used in production; of this amount, $155,000 was used on specific jobs. Manufacturing labor and salaries for the month totaled $250,000. $215,000 of the total manufacturing labor and salaries was traced to specific jobs, and the remainder was indirect labor used in the factory. The company recorded $19,000 of depreciation on the plant and plant equipment. The company also received a plant utility bill for $10,000 which will be paid at a later date. $62,000 of manufacturing overhead was allocated to specific jobs. By the end of January, was manufacturing overhead overallocated or underallocated? By how much?arrow_forwardIn January, Cullumber Company requisitions raw materials for production as follows: Job 1 $1,200, Job 2 $1,440, Job 3 $800, and general factory use $720. Prepare a summary journal entry to record raw materials used. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Jan. 31 Debit Creditarrow_forward
- Zang Co. manufactures its products in a continuous process involving two departments, Machining and Assembly. Prepare journal entries to record the following transactions related to production during June: If an amount box does not require an entry, leave it blank. a. Materials purchased on account, $180,000. fill in the blank ebb198fb5044008_2 fill in the blank ebb198fb5044008_4 b. Materials requisitioned by: Machining, $73,000 direct and $9,000 indirect materials; Assembly, $4,900 indirect materials. fill in the blank bc86e1f3a046016_2 fill in the blank bc86e1f3a046016_3 fill in the blank bc86e1f3a046016_5 fill in the blank bc86e1f3a046016_6 fill in the blank bc86e1f3a046016_8 fill in the blank bc86e1f3a046016_9 fill in the blank bc86e1f3a046016_11 fill in the blank bc86e1f3a046016_12 c. Direct labor used by Machining, $23,000; Assembly, $47,000. fill in the blank e1ca5ffd1ff8fbf_2 fill in the blank…arrow_forwardChrome Solutions Company manufactures special chromed parts made to the order and specifications of the customer. It has two production departments, Stamping and Plating, and two service departments, Power and Maintenance. In any production department, the job in process is wholly completed before the next job is started. The company operates on a fiscal year, which ends September 30. Following is the post-closing trial balance as of September 30: Additional information: The balance of the materials account represents the following: The company uses the FIFO method of accounting for all inventories. Material A is used in the Stamping Department, and materials B and C are used in the Plating Department. The balance of the work in process account represents the following costs that are applicable to Job 905. (The customer’s order is for 1,000 units of the finished product.) The finished goods account reflects the cost of Job 803, which was finished at the end of the preceding month and is awaiting delivery orders from the customer. At the beginning of the year, factory overhead application rates were based on the following data: In October, the following transactions were recorded: Purchased the following materials and supplies on account: The following materials were issued to the factory: Customers’ orders covered by Jobs 1001 and 1002 are for 1,000 and 500 units of finished product, respectively. Factory wages and office, sales, and administrative salaries are paid at the end of each month. (Assume FICA and federal income tax rates of 8% and 10%, respectively.) Record the company’s liability for state and federal unemployment taxes. (Assume rates of 4% and 1%, respectively, and that none of the employees had reached the $8,000 limit.) Record the payroll distribution for October. Wages of the supervisors, custodial personnel, etc., totaled $9,500; administrative salaries were $18,300. Miscellaneous factory overhead incurred during October totaled $4,230. Miscellaneous selling and administrative expenses were $1,500. These items as well as the FICA tax and federal income tax withheld for September were paid. (See account balances on the post-closing trial balance for September 30.) Annual depreciation on plant assets is calculated using the following rates (round to nearest dollar): Factory buildings–5% Machinery and equipment–20% Office equipment–20% The balance of the prepaid insurance account represents a three-year premium for a fire insurance policy covering the factory building and machinery. It was paid on the last day of the preceding month and became effective on October 1. The summary of factory overhead prepared from the factory overhead ledger is reproduced here: The total expenses of the Maintenance Department are distributed on the basis of floor space occupied by the Power Department (8,820 sq ft), Stamping Department (19,500 sq ft), and Plating Department (7,875 sq ft). The power department expenses are then allocated equally to the Stamping and Plating departments. After the actual factory overhead expenses have been distributed to the departmental accounts and the applied factory overhead has been recorded and posted, any balances in the departmental accounts are transferred to Under- and Overapplied Overhead. Jobs 905 and 1001 were finished during the month. Job 1002 is still in process at the end of the month. During the month, Jobs 803 and 905 were sold with a mark-on percentage of 50% on cost. Received $55,500 from customers in payment of their accounts. Checks were issued in the amount of $43,706 for payment of the payroll. 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Issued raw materials to be used in production, costing 47,000, and miscellaneous factory supplies costing 15,000. c. Recorded the payroll and the payments to employees as follows: factory wages (including 12,000 indirect labor), 41,000; and selling and administrative salaries, 7,000. Additional account titles include Wages Payable and Payroll. (Ignore payroll withholdings and deductions.) d. Distributed the payroll in (c). e. Recognized depreciation for the month at an annual rate of 5% on the building, 10% on the factory equipment, and 20% on the office equipment. The sales and administrative staff uses approximately one-fifth of the building for its offices. f. Incurred other expenses totaling 11,000. One-fourth of this amount is allocable to the office function. g. Transferred total factory overhead costs to Work in Process. h. Completed and transferred goods with a total cost of 91,000 to the finished goods storeroom. i. Sold goods costing 188,000 for 362,000. (Assume that all sales were made on account.) j. Collected accounts receivable in the amount of 345,000. k. Paid accounts payable totaling 158,000. Required: 1. Prepare journal entries to record the transactions. 2. Set up T-accounts. Post the beginning trial balance and the journal entries prepared in (1) to the accounts and determine the balances in the accounts on May 31. 3. Prepare a statement of cost of goods manufactured, an income statement, and a balance sheet. (Round amounts to the nearest whole dollar.)arrow_forward
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