PROBLEM 1-ANALYSIS OF TRANSACTIONS
INSTRUCTIONS: Indicate the titles of the accounts to be debited and credited in recording the selected transactions given below by inserting the letter or letters of the account titles listed in the appropriate columns. (Do not record the amounts.)
ACCOUNTS
A. Accounts Payable E. Factory Overhead-Dept. T I. Sales
B. Accounts Receivable F. Factory Overhead-Dept. V J. Wages Payable
C. Cash G. Finished Goods K. Work in Process-Dept. T
D. Cost of Goods Sold H. Materials L. Work in Process-Dept. V
TRANSACTIONS
0. Purchased materials on account, $19,500
1-2. Paid cash for wages owed, $32,000
3-4. Materials requisitioned by Department T, $75,200, for use directly in the manufacture of the product
5-6. Factory overhead applied to production in Department T, $2.50 per machine hour
7-8. Factory overhead applied to production in Department V, $3.00 per machine hour
9-10. Goods finished in Department T and transferred to Department V, $88,300
11-12. Goods finished in Department V and transferred to finished goods, $90,750
PROBLEM 2-COST OF GOODS SOLD & COST OF GOODS MANUFACTURED
INSTRUCTIONS: Using the information provided, for the month of July, calculate the following:
a) The Cost of Goods Manufactured for Tromer Company
b) The Cost of Goods Sold for Tromer Company
Tromer Company has the following information for July:
Cost of direct materials used in production $84,000
Direct Labor 110,000
Factory Overhead 56,000
Work in process inventory, July 1 41,000
Work in process inventory, July 31 37,000
Finished Goods Inventory, July 1 47,000
Finished Goods Inventory, July 31 34,000
PROBLEM 3 -JOURNAL ENTRIES FOR JOB ORDER COSTING
Tromer Publishing Inc. began printing operations on August 1. Jobs 101 and 102 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 103 and 104 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $1,000 of indirect materials and $12,000 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows:
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Job 101
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Direct Materials
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10,300
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Direct Labor
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4,000
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Factory Overhead
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3,000
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Total
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17,300
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Job 102
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Direct Materials
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4,830
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Direct Labor
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4,100
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Factory Overhead
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3,075
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Total
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12,005
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Job 103
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Direct Materials
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14,500
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Direct Labor
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4,320
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Factory Overhead
|
|
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Job 104
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Direct Materials
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2,920
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Direct Labor
|
580
|
|
Factory Overhead
|
|
INSTRUCTIONS: Using the information provided, create Journal Entries to record each of the following operations for August (one entry for each operation and show details of all calculations):
a) Direct and indirect materials used in the month.
b) Direct and indirect labor used in the month.
c) Factory overhead applied to all four jobs (A single overhead rate is used based on direct labor cost. Hint: see completed Jobs 101 & 102 to determine at what percentage of direct labor was factory overhead applied at).
d) Completion of Jobs 101 and 102 and transfer to Finished Goods.
PROBLEM 4 -PROCESS COST SYSTEMS
The Tromer Flour Company manufactures flour by a series of three processes, beginning with wheat grain being introduced in the Milling Department. From the Milling Department, the materials pass through the Sifting and Packaging departments, emerging as packaged refined flour.
The balance in the account Work in Process-Sifting Dept was a follows on May 1, 2012:
Work in Process - Sifting Department (800 units, 60% completed)
Direct Materials (800 x $2.25) $1,800
Conversion (800 x 60% x $1.65) 312
$2,112
The following costs were charged to Work in Process-Sifting Department during May:
Direct materials transferred from Milling Department:
14,200 units at $2.35 a unit $33,370
Direct labor 6,100
Factory overhead 3,924
During May, 14,000 units of flour were completed. Work in process-Sifting Department on May 31 was 1,000 units, 80% completed.
INSTRUCTIONS: Using the information provided, do the following (show details of all calculations):
a) Prepare a cost of production report for the Sifting Department for May. Footnote all calculations. (Use the Cost of Production report that we created for St. Arbucks Company in class on 12/13/11 as a model for layout and format.)
b) Journalize the entries for costs transferred from Milling to Sifting and the costs transferred from Sifting to Packaging.
c) Determine the increase or decrease in the cost per equivalent unit from April to May for direct materials and conversion costs.
d) Discuss the uses of the cost of production report and the results of part c. above.