Instructions: Complete the problems below. This assignment can be completed in either: Microsoft Excel, Word, or hand-written and scanned in PDF format. I prefer Microsoft Excel or Word but will not dock points for PDF format.
PART A. For 1-8, identify if the following, when manufactured, would best be accounted for by a job costing system, or process costing system.
- Apartment Building Construction
- Post-it Notes
- Custom wedding invitations
- Light Switch Covers
- Bic pens
- CPA firm audit arrangement
- Universal Studios movie production
PART B: For 9-20, complete the following for the manufacturing process based on the following information:
A predetermined overhead rate is used with direct labor costs as the activity base. The company expects annual overhead costs to be $450,000 and direct labor costs for the year to be $800,000.
Manufacturing Costs Incurred for the Period
The company purchased $40,000 of raw materials on account. Factory labor for the month was $68,000 with $3,500 employer payroll taxes. Manufacturing overhead for the month included the following: Utilities Payable $8,500; Prepaid Insurance $6,000; Accounts Payable for maintenance $7,000; Accumulated Depreciation-Equipment $8,500; Property Taxes Payable $2,400.
Assignment of Costs
Raw materials used during the month were $34,000 and indirect materials used were $4,000. Direct labor for the month on the time sheets was $62,000 and indirect labor was $2,500. Completed goods for the month cost $98,000 and were all sold on account for $152,000. There was no work in process or finished goods inventory for January 1.
- Compute the predetermined overhead rate.
- Prepare the journal entry to record the purchase of raw materials.
- Prepare the journal entry to record the factory labor for the month.
- Prepare the journal entry to record the manufacturing overhead for the month.
- Prepare the journal entry to apply the raw material requisitions to work in process for the month.
- Prepare the journal entry to apply the time sheets to work in process for the month.
- Prepare the journal entry to apply the manufacturing overhead to work in process for the month.
- Prepare the journal entry to transfer work in process to finished goods for the month.
- Prepare the journal entry to record the sales for the month.
- Prepare the journal entry to record the amount of under- or over-applied manufacturing overhead?
- Prepare a Cost of Goods Manufactured Schedule for the period.
- Prepare a partial income statement for the period showing sales, cost of goods sold, and gross profit.