402. Award: 1.00 point  

The following selected data were taken from the records of the Fisher Foil Company. The company uses a job costing system to account for its manufacturing
costs. Fisher's fiscal year runs from January 1 to December 31; manufacturing overhead is closed out only at the end of the fiscal year. The following information
relates to August operations.
 
(1.) Jobs in process on August 1.
 
Job No. Materials   Labor  Overhead
W12 $ 800     $1,200     ??
X13  1,000      1,620     ??
 
(2.) Jobs completed during August: W12, X13, Y14.
(3.) Material requisitions and labor time tickets indicated the following:
 
Material Time
Job No Requisition   Tickets
W12 $ 610    $ 760 
X13   370     1,420 
Y14   2,780      3,100 
Z15  4,050     1,080 
General use   390      540 
 
(4.) Jobs sold during August: W12, X13.
(5.) Fisher applies overhead to production based upon labor costs.
(6.) Selected account balances on August 1 were:
 
      

m
Overhead $ 1,400 overapplied

e r as
Materials   5,175 
Work in process  9,555 

co
Finished goods   -0- 

eH w
 
(7.) Various overhead incurred (excluding indirect materials and indirect labor) during August, $13,500.
(8.) Materials (direct and indirect) purchased during August, $10,905.

o.
Required:
rs e
ou urc
(a) What is the balance in the Material Inventory account on August 31?
(b) Is the manufacturing overhead account over- or underapplied on August 31? By how much?
(c) Compute the cost of goods manufactured for August.
(d) Compute the cost of goods sold for August.
(e) What is the balance of the Work-in-Process Inventory account on August 31?
o
aC s
vi y re

(a)
$5,175 + $10,905 – ($610 + $370 + $2,780 + $4,050 + $390) = ending balance = $7,880

(b)
ed d

Overhead in Work-in-Process Inventory, August 1: $9,555 – ($800 + $1,000) – ($1,200 + $1,620) = $4,935; overhead rate = $4,935/$2,820 = 175% of Direct
Labor Costs
ar stu

MOH debits: IM $390 + IL 540 + incurred $13,500 = $14,430

MOH credits: Beg Bal $1,400 + applied $11,130 = $12,530
Ending MOH: $14,430 – 12,530 = $1,900 debit balance: underapplied

(c)
Job Beg Bal DM DL   OH   Total
sh is

W12 $ 4,100 $ 610 $ 760 $ 1,330   $ 6,800

X13   5,455   370  1,420  2,485     9,730
Y14      2,780   3,100  5,425     11,305
Th

Cost of goods manufactured                   $27,835

(d)
W12 + X13: $6,800 + $9,730 = $16,530

(e)
Job Z15: Material ($4,050) + Labor ($1,080) + Overhead ($1,890) = $7,020

References

Essay Learning Objective: 07-02 Assign

costs in a job cost system.

Difficulty: 3 Hard Learning Objective: 07-03

Account for overhead using
predetermined rates.

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https://www.coursehero.com/file/29678565/ACCT3014Sol101pdf/
  
 403. Award: 1.00 point  

Augusta Test Systems manufactures automated test systems that perform quality inspections during and at the completion of the manufacturing process. As
most manufacturing processes are unique, Augusta's test equipment is designed to customer specifications, and each system has a selling price in excess of
$300,000. The company uses a job-order cost system based on the full absorption of actual costs and applies overhead on the basis of machine hours using a
predetermined overhead rate. For the fiscal year ended November 30 budgeted manufacturing overhead was $1,960,000, and the expected activity level was
98,000 machine hours. Data regarding several jobs at Augusta are presented below.
By the end of November all jobs but RX-115 were completed, and all completed jobs had been delivered to customers with the exception of SL-205.
 
Balance Direct
   
Job No. 10/31 Materials Direct Labor   Machine Hours
X J-107 $118,600     $ 4,000     $ 8,400     150
ST-211  121,450       2,500       12,160     300
XD-108   21,800      86,400      36,650     3,100
SL-205   34,350       71,800       32,175     2,700
RX-115           18,990       21,845     1,400

Required:

(a) Determine the balance in the Finished Goods Inventory on November 30.
(b) Compute the cost of goods manufactured for November.
(c) Compute the Cost of Goods Sold for November.
(d) Determine the balance in Work-In-Process Inventory on November 30.

m
e r as
Overhead rate = $1,960,000/98,000 hrs = $20/hr

co
(a)
Only SL-205 is in inventory: $34,350 + $71,800 + $32,175 + (2,700 × $20) = $192,325

eH w
(b)

o.
XJ-107 + ST-211 + XD-108 + SL-205: $675,285
XJ-107: $118,600 + $4,000 + $8,400 + (150 × $20) = $134,000
rs e
ST-211: $121,450 + $2,500 + $12,160 + (300 × $20) = $142,110
ou urc
XD-108: $21,800 + $86,400 + $36,650 + (3,100 × $20) = $206,850
SL-205: $34,350 + $71,800 + $32,175 + (2,700 × $20) = $192,325

(c)
$675,285 – $192,325 = $482,960
o

(d)
Only RX-115: $18,990 + $21,845 + (1,400 × $20) = $68,835
aC s
vi y re

References

Essay Learning Objective: 07-02 Assign

costs in a job cost system.
ed d

Difficulty: 2 Medium Learning Objective: 07-03

Account for overhead using
ar stu

predetermined rates.
sh is
Th

This study source was downloaded by 100000826810963 from CourseHero.com on 06-07-2021 21:44:18 GMT -05:00

https://www.coursehero.com/file/29678565/ACCT3014Sol101pdf/
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