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Managerial Accounting 1B
Financial
and Managerial Accounting
Chapter 15

1.
Exercise 15-4 Analysis of cost flows L.O. C2, P1, P2, P3

As of the end of June, the job
cost sheets at Racing Wheels, Inc., show the following total costs
accumulated on three custom jobs.

Job
102

Job
103

Job
104

Direct materials

$
30,000

$
66,000

$
54,000

Direct labor

16,000

28,400

42,000

Overhead

8,000

14,200

21,000

Job 102 was started in production
in May and the following costs were assigned to it in May: direct materials,
$12,000; direct labor, $3,600; and overhead, $1,800. Jobs 103 and 104 are
started in June. Overhead cost is applied with a predetermined rate based on
direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is
expected to be finished in July. No raw materials are used indirectly in
June. Using this information, answer the following questions. (Assume this
companys predetermined overhead rate did not change across these months).

1.

What is the cost of the raw
materials requisitioned in June for each of the three jobs?(Omit the “$” sign in your response.)

Job 102

Job 103

Job 104

2.

How much direct labor cost is
incurred during June for each of the three jobs?(Omit the “$” sign in your response.)

3.

What predetermined overhead rate
is used during June?(Omit the “%”
sign in your response.)

Predetermined overhead
rate

4.

How much total cost is transferred
to finished goods during June?(Omit the
“$” sign in your response.)

Total transferred cost

$

2.

Exercise 15-6 Analysis of costs assigned to goods in process
L.O. P3

Lopez Company uses a job order
cost accounting system that charges overhead to jobs on the basis of direct
material cost. At year-end, the Goods in Process Inventory account shows the
following.

Date

Explanation

Debit

Credit

Balance

2011

Dec.
31

Direct materials cost

1,500,000

1,500,000

31

Direct labor cost

240,000

1,740,000

31

Overhead costs

450,000

2,190,000

31

To finished goods

2,100,000

90,000

1.

Determine the overhead rate used
(based on direct material cost).(Omit the
“%” sign in your response.)

2.

Only one job remained in the goods
in process inventory at December 31, 2011. Its direct materials cost is
$30,000. How much direct labor cost and overhead cost are assigned to
it?(Omit the “$” sign in your
response.)

3.
Exercise 15-7 Cost flows in a job order cost system L.O. P1, P2,
P3, P4

The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system.

Compute the following amounts for
the month of May. (Input all amounts as
positive values. Omit the “$” sign in your response.)

1.

Cost of direct materials used.

2.

Cost of direct labor used.

3.

Cost of goods manufactured.

4.

Cost of goods sold.*

5.

Gross profit.

6.

___________________

4.Exercise 15-8 Journal entries for materials L.O. P1

The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system.

1.

Raw materials purchases for cash.

2.

Direct materials usage.

3.

Indirect materials usage.

Prepare journal entries for the
above events for the month of May. (Omit the
“$” sign in your response.)

5.Exercise 15-9 Journal entries for labor L.O. P2

The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system.

1.

Factory payroll costs in cash.

2.

Direct labor usage.

3.

Indirect labor usage.

Prepare journal entries for the
above events for the month of May. (Omit the
“$” sign in your response.)

6.Exercise 15-10
Journal entries for overhead L.O. P3

The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system.

1.

Factory overhead excluding
indirect materials and indirect labor (record credit to Other Accounts).

2.

Application of overhead to goods
in process.

Prepare journal entries for the
above events for the month of May. (Omit the
“$” sign in your response.)

7.Exercise 15-11 Adjusting factory
overhead L.O. P4

The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system.

Prepare the journal entry to
allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.(Omit the “$” sign in your response.)

Problem 15-1A Production costs computed and recorded; reports
prepared L.O. C2, P1, P2, P3, P4
[The following information applies to the questions displayed
below.]

Winfrey Co.’s March 31 inventory
of raw materials is $150,000. Raw materials purchases in April are $400,000,
and factory payroll cost in April is $220,000. Overhead costs incurred in
April are: indirect materials, $30,000; indirect labor, $14,000; factory
rent, $20,000; factory utilities, $12,000; and factory equipment
depreciation, $30,000. The predetermined overhead rate is 50% of direct labor
cost. Job 306 is sold for $380,000 cash in April. Costs of the three jobs
worked on in April follow.

Job
306

Job
307

Job
308

Balances on March 31

Direct
materials

$

14,000

$

18,000

Direct
labor

18,000

16,000

Applied
overhead

9,000

8,000

Costs during April

Direct
materials

100,000

170,000

$

80,000

Direct
labor

30,000

56,000

120,000

Applied
overhead

?

?

?

Status on April 30

Finished
(sold)

Finished
(unsold)

In
process

8.
Problem 15-1A Part 1

Required:

1.

Determine the total of each
production cost incurred for April (direct labor, direct materials, and
applied overhead), and the total cost assigned to each job (including the
balances from March 31).(Leave no cells
blank – be certain to enter “0” wherever required. Omit the
“$” sign in your response. )

9.
Problem 15-1A Part 2

a.

Materials purchases (on credit),
factory payroll (paid in cash), and actual overhead costs including indirect
materials and indirect labor. (Factory rent and utilities are paid in cash.)

b.

Assignment of direct materials,
direct labor, and applied overhead costs to the Goods in Process Inventory.

c.

Transfer of Jobs 306 and 307 to
the Finished Goods Inventory.

d.

Cost of goods sold for Job 306.

e.

Revenue from the sale of Job 306.

f.

Assignment of any underapplied or
overapplied overhead to the Cost of Goods Sold account. (The amount is not

material.)

2.

Prepare journal entries for the
month of April to record the above transactions.(Omit the “$” sign in your response.)

10.Problem 15-1A Part 3

3.

Prepare a manufacturing statement
for April (use a single line presentation for direct materials and show the
details of overhead cost.)(Amounts to be
deducted should be indicated with a minus sign. Omit the “$” sign
in your response.)

11.Problem 15-1A Part
4

4.1

Compute gross profit for
April.(Omit the “$” sign in your
response.)

Gross profit

4.2

Show how to present the
inventories on the April 30 balance sheet.(Omit
the “$” sign in your response.)

Managerial Accounting 1BFinancial
and Managerial AccountingChapter 151.Exercise 15-4 Analysis of cost flows L.O. C2, P1, P2, P3As of the end of June, the job
cost sheets at Racing Wheels, Inc., show the following total costs
accumulated on three custom jobs. Job
102Job
103Job
104 Direct materials$
30,000 $
66,000 $
54,000 Direct labor16,000
28,400 42,000
Overhead8,000
14,200 21,000
Job 102 was started in production
in May and the following costs were assigned to it in May: direct materials,
$12,000; direct labor, $3,600; and overhead, $1,800. Jobs 103 and 104 are
started in June. Overhead cost is applied with a predetermined rate based on
direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is
expected to be finished in July. No raw materials are used indirectly in
June. Using this information, answer the following questions. (Assume this
companys predetermined overhead rate did not change across these months). 1.What is the cost of the raw
materials requisitioned in June for each of the three jobs?(Omit the “$” sign in your response.) Job 102 Job 103 Job 104 2.How much direct labor cost is
incurred during June for each of the three jobs?(Omit the “$” sign in your response.) 3.What predetermined overhead rate
is used during June?(Omit the “%”
sign in your response.) Predetermined overhead
rate 4.How much total cost is transferred
to finished goods during June?(Omit the
“$” sign in your response.) Total transferred cost$ 2. Exercise 15-6 Analysis of costs assigned to goods in process
L.O. P3Lopez Company uses a job order
cost accounting system that charges overhead to jobs on the basis of direct
material cost. At year-end, the Goods in Process Inventory account shows the
following. DateExplanationDebitCreditBalance2011 Dec.
31 Direct materials cost1,500,000
1,500,000
31 Direct labor cost240,000
1,740,000
31 Overhead costs450,000
2,190,000
31 To finished goods 2,100,000
90,000
1.Determine the overhead rate used
(based on direct material cost).(Omit the
“%” sign in your response.)2.Only one job remained in the goods
in process inventory at December 31, 2011. Its direct materials cost is
$30,000. How much direct labor cost and overhead cost are assigned to
it?(Omit the “$” sign in your
response.) 3.Exercise 15-7 Cost flows in a job order cost system L.O. P1, P2,
P3, P4The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system. Compute the following amounts for
the month of May. (Input all amounts as
positive values. Omit the “$” sign in your response.) 1.Cost of direct materials used.2.Cost of direct labor used.3.Cost of goods manufactured.4.Cost of goods sold.*5.Gross profit.6.___________________4.Exercise 15-8 Journal entries for materials L.O. P1The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system. 1.Raw materials purchases for cash.2.Direct materials usage.3.Indirect materials usage. Prepare journal entries for the
above events for the month of May. (Omit the
“$” sign in your response.) 5.Exercise 15-9 Journal entries for labor L.O. P2The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system. 1.Factory payroll costs in cash.2.Direct labor usage.3.Indirect labor usage. Prepare journal entries for the
above events for the month of May. (Omit the
“$” sign in your response.) 6.Exercise 15-10
Journal entries for overhead L.O. P3The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system. 1.Factory overhead excluding
indirect materials and indirect labor (record credit to Other Accounts).2.Application of overhead to goods
in process. Prepare journal entries for the
above events for the month of May. (Omit the
“$” sign in your response.) 7.Exercise 15-11 Adjusting factory
overhead L.O. P4The following information is
available for Lock-Down Company, which produces special-order security
products and uses a job order cost accounting system. Prepare the journal entry to
allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.(Omit the “$” sign in your response.)Problem 15-1A Production costs computed and recorded; reports
prepared L.O. C2, P1, P2, P3, P4[The following information applies to the questions displayed
below.]Winfrey Co.’s March 31 inventory
of raw materials is $150,000. Raw materials purchases in April are $400,000,
and factory payroll cost in April is $220,000. Overhead costs incurred in
April are: indirect materials, $30,000; indirect labor, $14,000; factory
rent, $20,000; factory utilities, $12,000; and factory equipment
depreciation, $30,000. The predetermined overhead rate is 50% of direct labor
cost. Job 306 is sold for $380,000 cash in April. Costs of the three jobs
worked on in April follow. Job
306Job
307Job
308 Balances on March 31 Direct
materials $14,000 $18,000 Direct
labor 18,000 16,000 Applied
overhead 9,000 8,000 Costs during April Direct
materials 100,000 170,000 $ 80,000 Direct
labor 30,000 56,000 120,000 Applied
overhead ? ? ? Status on April 30Finished
(sold) Finished
(unsold) In
processRequired:1.Determine the total of each
production cost incurred for April (direct labor, direct materials, and
applied overhead), and the total cost assigned to each job (including the
balances from March 31).(Leave no cells
blank – be certain to enter “0” wherever required. Omit the
“$” sign in your response. ) 9.Problem 15-1A Part 2a.Materials purchases (on credit),
factory payroll (paid in cash), and actual overhead costs including indirect
materials and indirect labor. (Factory rent and utilities are paid in cash.)b.Assignment of direct materials,
direct labor, and applied overhead costs to the Goods in Process Inventory.c.Transfer of Jobs 306 and 307 to
the Finished Goods Inventory.d.Cost of goods sold for Job 306.e.Revenue from the sale of Job 306.f.Assignment of any underapplied or
overapplied overhead to the Cost of Goods Sold account. (The amount is not

material.)2.Prepare journal entries for the
month of April to record the above transactions.(Omit the “$” sign in your response.) 10.Problem 15-1A Part 33.Prepare a manufacturing statement
for April (use a single line presentation for direct materials and show the
details of overhead cost.)(Amounts to be
deducted should be indicated with a minus sign. Omit the “$” sign
in your response.) 11.Problem 15-1A Part
44.1Compute gross profit for
April.(Omit the “$” sign in your
response.) Gross profit 4.2Show how to present the
inventories on the April 30 balance sheet.(Omit
the “$” sign in your response.)

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