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Question(s) / Instruction(s):

TO ACCOUNT FOR THE COST FLOW IN THE MANUFACTURE OF THE STATUARY.  FIGLEAF USES JOB COSTING.  THIS IS THE DATA FOR MAY 2005 AND RELEVANT DATA FOR JUNE, WHICH IS THE MONTH YOU ARE TO START:

 

 

FIGLEAF.COM

POST-CLOSING TRIAL BALANCE

MAY 31, 2005

 

CASH                                                                         475,000

ACCOUNTS RECEIVABLE                                                 75,000

ALLOW FOR UNCOLLECTIBLE ACCTS                                                            5,000

NOTES RECEIVABLE                                           200,000          

RAW MATERIALS                                                  50,000

WORK IN PROCESS, PEGASUS                         25,000

WORK IN PROCESS, CERBERUS                     65,000

WORK IN PROCESS, ACHILLES                       10,000

FINISHED GOODS                                                    75,000          

MOLDING MACHINES                                       1,000,000          

ACCUMULATED DEP(100K/YEAR)                                                        491,667

OFFICE FURNITURE/EQUIPMENT                       75,000

ACCUMULATED DEP(5K/YEAR)                                                                         14,583

PATENTS                                                                      25,000

ACCOUNTS PAYABLE                                                                              125,000

NOTES PAYABLE                                                                                         25,000

COMMON STOCK                                                                                       600,000

RETAINED EARNINGS                                                                              813,750

                                               

TOTALS                                                              $2,075,000                    $2,075,000

 

 

 

 

 

 

 

 

TRANSACTIONS FOR THE MONTH OF JUNE:

 

1)      PURCHASED RAW MATERIALS (CEMENT, DYES, STONES) TOTALLING $350,000.

2)      REQUISITIONED INTO PRODUCTION IN MONTH OF JUNE:  $350,000.

3)      2 JOBS FINISHED IN JUNE:

 

 

A)  PRODUCTION OF 400 PEGASUS STATUES (PRICE:  $750/EACH)  COSTS:

1)        RAW MATERIALS USED:  $125,000 IN RAW MATERIALS. 

 

2)  DIRECT LABOR COSTS:  ACTUAL HOURS WORKED ON THIS JOB:   1900.  AVERAGE COST PER HOUR:  $20       

 

  1. OVERHEAD:  THE COMPANY USES A PREDETERMINED OVERHEAD RATE BASED ON DIRECT LABOR HOURS CALCULATED AT THE BEGINNING OF THE FISCAL YEAR.  THE TOTAL OVERHEAD ESTIMATED AT THE BEGINNING OF THE YEAR WAS $2,000,000.  THE COMPANY ESTIMATED IT WOULD USE 50,000 HOURS OF DIRECT LABOR FOR YEAR.       

 

 B): PRODUCTION OF 600 CERBERUS STATUES:  PRICE:  $600 EACH.

1)      RAW MATERIALS USED:  $175,000.

2)      DIRECT LABOR:  ACTUAL HOURS WORKED:  2,000.  AVERAGE COST PER HOUR:  $20

3)      OVERHEAD APPLIED AGAIN USING THE ABOVE PREDETERMINED OVERHEAD RATE.

 

C)  A THIRD JOB,PRODUCTION OF 200 ACHILLES STATUES, IS STILL ON THE FACTORY FLOOR AT THE END OF THE MONTH.  THE FOLLOWING INFORMATION IS AVAILABLE:  PRICE:  $500 EACH.

            1)  RAW MATERIALS USED SO FAR:  $50,000

            2)  DIRECT LABOR HOURS USED:  900 AT $20/HOUR

            3)  OVERHEAD AGAIN IS APPLIED AT THE PREDETERMINED OVERHEAD RATE.

 

 

 

ADDITIONAL DATA: 

 

ACTUAL COSTS INCURRED IN THE MONTH OF JUNE:

 

1) RENT EXPENSE IS $10,000/MONTH.  ¾ OF THIS IS FACTORY RENT.

2) UTILITY EXPENSE IS $4,250 FOR THE MONTH OF JUNE.  $3,250 IS FOR FACTORY UTILITY COSTS; THE REMAINING IS FOR THE ADMINISTRATIVE OFFICES.

3) THE SALARIES FOR THE MONTH ARE $321,000.  THIS INCLUDES: $96,000 INCURRED FOR DIRECT LABOR COSTS (ALREADY RECORDED); $125,000 FOR ADMINISTRATIVE AND SALES SALARIES; THE REMAINING IS FOR INDIRECT LABOR COSTS.

4) ALL DEPRECIATION ON THE MOLDING MACHINES IS A FACTORY EXPENSE.

5) 2/3 OF THE PROPERTY TAX EXPENSE IS LEVIED ON THE FACTORY; THE PROPERTY TAX ESTIMATED FOR EACH MONTH IS $4,000.

6)  ADDITIONAL MISCELLANEOUS MANUFACTURING OVERHEAD AMOUNTED TO $70,000.

 

 

INFORMATION NECESSARY TO PREPARE ENTRIES: 

ALL SALES ARE ON ACCOUNT.

ALL PURCHASES OF INVENTORYARE ON ACCOUNT.

ALL OTHER EXPENSES ARE PAID IN CASH.

DURING THE MONTH THE COMPANY PAID $125,000 ON ACCOUNT AND RECEIVED $75,000 ON ACCOUNT.

 

SALES FOR THE MONTH: 

1)      SOLD BEGINNING INVENTORY IN FINISHED GOODS FOR $150,000

2)      SOLD ALL OF THE PEGASUS ORDER OF 400 STATUES – PRICE $750 EACH.

 

REMAINING IN FINISHED GOODS INVENTORY:  THE CERBERUS ORDER.

REMAINING IN WORK IN PROCESS INVENTORY:  THE ACHILLES ORDER.

 

YOU WILL NEED TO A) PREPARE THE JOURNAL ENTRIES TO RECORD THE TRANSACTIONS FOR THE MONTH INCLUDING THE FLOW OF INVENTORY AND APPLIED OVERHEAD; B) DETERMINE WHETHER OVERHEAD IS OVER- OR UNDERAPPLIED FOR THE MONTH AND CLOSE OVERHEAD TO COST OF GOODS SOLD. C) PREPARE A SCHEDULE OF COST OF GOODS

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