Managerial Accounting 1B – Ch15

Managerial Accounting 1B – Ch15

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 company s 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.)

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.)

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

5. 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.

April 30 May 31
Inventories
Raw materials $ 40,000 $ 50,000
Goods in process 9,600 19,500
Finished goods 60,000 33,200
Activities and information for May
Raw materials purchases (paid with cash) 189,000
Factory payroll (paid with cash) 400,000
Factory overhead
Indirect materials 12,000
Indirect labor 75,000
Other overhead costs 100,500
Sales (received in cash) 1,200,000
Predetermined overhead rate based on direct labor cost 65 %

1. Compute the following amounts for the month of May. (Input all amounts as positive values. Omit the “$” sig

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.

April 30 May 31
Inventories
Raw materials $ 40,000 $ 50,000
Goods in process 9,600 19,500
Finished goods 60,000 33,200
Activities and information for May
Raw materials purchases (paid with cash) 189,000
Factory payroll (paid with cash) 400,000
Factory overhead
Indirect materials 12,000
Indirect labor 75,000
Other overhead costs 100,500
Sales (received in cash) 1,200,000
Predetermined overhead rate based on direct labor cost 65 %

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.

April 30 May 31
Inventories
Raw materials $ 40,000 $ 50,000
Goods in process 9,600 19,500
Finished goods 60,000 33,200
Activities and information for May
Raw materials purchases (paid with cash) 189,000
Factory payroll (paid with cash) 400,000
Factory overhead
Indirect materials 12,000
Indirect labor 75,000
Other overhead costs 100,500
Sales (received in cash) 1,200,000
Predetermined overhead rate based on direct labor cost 65 %

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.

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