copy and 10 00 points southworth company uses a job order costing system and applies 678498

Aug 30, 2021 | Uncategorized

Copy and 10.00 points

Southworth Company uses a job order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $248,000 of manufacturing overhead for an estimated allocation base of $155,000 direct material dollars.

The following transactions took place during the year (all purchases and services were acquired on account):

a. Raw materials purchased, $142,000.
b. Raw materials requisitioned for use in production (all direct materials), $150,000.
c. Utility bills incurred in the factory, $21,000.
d. Costs for salaries and wages were incurred as follows:

Direct labor $ 216,000
Indirect labor $ 90,000
Selling and administrative salaries $ 145,000

e. Maintenance costs incurred in the factory, $15,000.
f. Advertising costs incurred, $130,000.
g.

Depreciation recorded for the year, $50,000 (90% relates to factory assets, and the remainder relates to selling and administrative assets).
h.

Rental cost incurred on buildings, $90,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration).
i. Miscellaneous selling and administrative costs incurred, $17,000.
j. Manufacturing overhead cost was applied to jobs, $ ? .
k.

Cost of goods manufactured for the year, $590,000.
l.

Sales for the year (all on account) totaled $1,000,000. These goods cost $600,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were as follows:
Raw materials $ 18,000
Work in process $ 24,000
Finished Goods $ 35,000
Required:
1. Prepare journal entries to record the above data.

General Journal Debit Credit
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l
2.

Post your entries to T accounts. (Don’t forget to enter the opening inventory balances above.) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. (Record the transactions in the given order.)

Accounts Receivable

Raw Materials
Bal.
Bal.

Work in Process
Bal.
Bal.
Finished Goods
Bal.
Bal.
Manufacturing Overhead
Bal.
Accounts Payable
Bal.
Accumulated Depreciation
Depreciation Expense
Salaries & Wages Payable
Selling and Administrative Salaries
Miscellaneous Expense

Advertising Expense

Rent Expense
Cost of Goods Sold
Sales
3.

Prepare a schedule of cost of goods manufactured. (Input all amounts as positive values.)

Southworth Company
Schedule of Cost of Goods Manufactured
Direct materials:
$
:
:
Materials used in production $
Total manufacturing cost
:
:
Cost of goods manufactured $
4.

Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold. (Input all amounts as positive values.)

General Journal Debit Credit

Schedule of cost of goods sold:
$
:
:
:
Adjusted cost of goods sold $
5.

Prepare an income statement for the year. (Input all amounts as positive values.)

Southworth Company
Income Statement
$
Selling and administrative expenses:
$
$
6.

Job 218 was one of the many jobs started and completed during the year. The job required $3,600 in direct materials and 400 hours of direct labor time at a rate of $11 per hour. If the job contained 500 units and the company billed at 75% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer? (Round your answer to 2 decimal places.)

Price charged for Job 218 $ per unit

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