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EX19-2.

) The following information is available for the first month of operations of Korv
Inc., a manufacturer and craft items:

Sales &n bsp; $775,000


Gross profit 265,000
Indirect labor &nbs p; 63,000
Indirect materials 32,000
Other factory overhead & nbsp; 17,500
Materials purchased & nbsp; 303,000
Total manufacturing cost for the period 620,000
Materials, end of period 35,000

Using the above information, determine the following missing amounts:

a.) Cost
b.) Direct materials cost
c.) Direct labor cost

Ex19-4.) Materials issued for the current month are as follows:

Requisition No. Material Job No. Amount


811 ; Aluminum 511 $10,400
812 ; Steel 514 18,650
813 &n bsp; Plastic 526 875
814 &nb sp; Abrasives Indirect 325
815 Titanium Alloy 533 42,300

Journalize the entry to record the issuance of materials.

Ex19-7.) The weekly tickets indicate the following distribution of labor hours for three
direct labor employees:

Hours
Job 111 Job 112 Job 113 Process Improvement
Johnny Daniels 18 & nbsp; 10 5 7
Jack Walker 7 &nbs p; 8 23 2
Jim Morgan ; 8 12 16 4

The Direct labor rate earned by the three employees is as follows:


Daniels $11.40
Walker 13.50
Morgan 11.75

The process improvement category includes training, quality improvement,


housekeeping, and other indirect tasks.
a.) Journalize the entry to record the factory labor costs for the week.
b.) assume that jobs 111 and 112 were completed but not sold during the week and that
job 113 remained incomplete at the end of the week. How would the direct labor costs for
all three jobs be reflected on the financial statements at the end of the week?

Ex19-8.) Chasse Homes Inc. manufactures mobile homes. Chase uses a job order cost
system. The time tickets from October jobs are summarized below.

Job 502 $2,352


Job 503 1.440
Job 504 960
Job 505 1,320
Factory supervision 2,760

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $20
per direct labor hour. The direct labor rate is $12 per hour.
a.) Journalize the entry to record the factory labor costs.
b.) Journalize the entry to apply overhead to production for October.

Ex19-9.) Staten Island Turbine operates two factories. The company applies factory
overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct
labor hours in factory 2. Estimated factory overhead costs, direct labor hours, and
machine hours are as follows:
Factory 1 Factory 2
Estimated factory overhead cost for fiscal
year beginning May1 &n bsp; $236,800 $118,000
Estimated direct labor hours for year &nb sp; 9,100
Estimated machine hours for year 12,800
Actual factory overhead cost for May & nbsp; $23,200 $11,625
Actual direct labor hours for May 885
Actual Machine Hours for May 1,270

a.) Determine the factory overhead rate for factory 1.


b.) Determine the factory overhead rate for factory 2.
c.) Journalize the entries to apply factory overhead to production in each factory for May.

d.) Determine the balances of the factory accounts for each factory as of May 31, and
indicate whether the amounts represent overapplied or underapplied factory overhead.

Ex19-12.) The following account appears in the ledger after only part of the postings
have been completed for January.
Work In Progress
Balance January 1 $15,500
Direct Materials 86,200
Direct labor 64,300
Factory overhead 93,700
Jobs finished during January are summarized as follows:
Job 320 $57,600 Job 327 $26,100
Job 326 75,000 Job 350 94,800

a.) Journalize the entry to record the jobs completed.


b.) Determine the cost of the unfinished jobs at January 31.

Ex19-14.) The following events took place for Wreckin Ronnie Inc. during July 2008, the
first month of operations as a producer of road bikes:
>Purchased $165,800 of Materials.
>Used $147,600 of direct materials in production.
>Incurred $96,250 of direct labor wages.
>Applied factory overhead at a rate of 80% of direct labor cost.
>Transferred $302,900 of work in process to finished goods.
>Sold goods with a cost of $301,300.
>Sold goods for $520,000.
>Incurred $119,000 of selling expenses.
>incurred $52,100 of administrative expenses.

a.) Prepare the July income statement for Wrekin Ronnie. Assume that Wrekin Ronnie
uses the perpetual inventory method.
b.)Determine the inventory balances at the end of the first month of operations.

Pr19-2a.) Godwin Fixtures Co. uses a job order cost system. The following data
summarize the operations related to production for April 2008, the first mouth of
operations:
a. Materials purchased on account, $137,000.
b.) Materials requisitioned and factory labor used:
Job Materials Factory
No.601 $ 18,100 $17,000
&nbs p; No.602 20,000 25,500
No.603 & nbsp; 13,050 9,700
No.604 34,500 33,550
No.605 &nb sp; 15,700 14,800
No.606 &nbs p; 17,800 18,300
For general factory use 6,600 47,000

c.)Factory overhead cost incurred on account, $4,950.


b.)Depreciation of machinery and equipment, $3,700.
c.)The factory overhead rate is $53 per machine hour. Machine hours used:
Job Machine Hours
No.601 215
No.602 230
No.603 175
No,604 300
N0.605 198
No.606 225
TOTAL 1,343

f.) Jobs completed: 601,602,603and 605.


g.) Jobs were shipped and customers were billed as fallows: Job 601,$72,750;Job
602,$88,780;Job 605,$74,500.

Instructions:
1.) Journalize the entries to record the summarized operations.
2.) Post the appropriate entries to t accounts for work in process and finished goods,
using the identifying letters as dates. Insert memorandum account balances as of the end
of the month.
3.) Prepare a schedule of unfinished jobs to support the balance in work in process
account.
4.) Prepare a schedule of completed jobs on hand to support the balance in the finished
goods account.

Ex. 192

a.
Cost of goods sold:
Sales................................................................................................ $775,000
Less gross profit............................................................................ 265,000
Cost of goods sold.......................................................................... $510,000
b.
Direct materials cost:
Materials purchased.....................................................................
$303,000
Less: Indirect materials.............................................................. $ 32,000
Materials inventory........................................................... 35,000
67,000
Direct materials cost.....................................................................
$236,000
c.
Direct labor cost:
Total manufacturing costs for the period....................................
$620,000
Less: Direct materials cost......................................................... $236,000
Factory overhead.............................................................. 112,500*
348,500
Direct labor cost............................................................................
$271,500
*$63,000 + $32,000 + $17,500

Ex. 194

Work in Process................................................................................ 72,225


Factory Overhead............................................................................ 325
Materials.................................................................................. 72,550

Ex. 197

a. Work in Process........................................................................ 1,312.20


Factory Overhead..................................................................... 153.80
Wages Payable....................................................................
1,466.00

Supporting Calculations:
Labor Costs (Hourly rate Hours)

Direct
Labor
Hourly (sum of
Indirect
Rate Job 111 Job 112 Job 113 job costs)
Labor
Johnny Daniels $11.40 $205.20 $114.00 $ 57.00 $ 376.20 $
79.80
Jack Walker 13.50 94.50 108.00 310.50 513.00
27.00
Jim Morgan 11.75 94.00 141.00 188.00 423.00
47.00
$1,312.20
$153.80
b. The direct labor costs in the completed jobs would become part of finished
goods inventory. The direct labor costs in Job 113 would remain part of work in
process inventory.

Ex. 198

a. Work in Process........................................................................ 6,072


Factory Overhead..................................................................... 2,760
Wages Payable....................................................................

b. Work in Process........................................................................ 10,120


Factory Overhead...............................................................
$6,072/$12 per hour = 506 hours
506 hours $20 per hour = $10,120

Ex. 199

a. Factory 1: $18.50 per machine hour ($236,800/12,800 machine hours)

b. Factory 2: $13.00 per direct labor hour ($118,300/9,100 direct labor hours)
c. Factory 1:
Work in Process.................................................................. 23,495
Factory Overhead.........................................................
($18.50 1,270)
Factory 2:
Work in Process.................................................................. 11,505
Factory Overhead.........................................................
($13.00 885)
d. Factory 1$295 credit (overapplied) ($23,495 $23,200)

Factory 2$120 debit (underapplied) ($11,505 $11,625)

Ex. 1912

a. Finished Goods.......................................................................... 253,900


Work in Process..................................................................
253,900
b. Cost of unfinished jobs at January 31:
Balance in Work in Process at January 1......................... $ 15,500
Add: Direct materials...................................................... 86,200
Direct labor............................................................. 64,300
Factory overhead.................................................... 93,700
$259,700
Less: Jobs finished during January................................
253,900
Balance in Work in Process at January 31....................... $
5,800

Ex. 1914

a. WRECKIN RONNIE, INC.


Income Statement
For the Month Ended July 31, 2008
Revenues........................................................................................ $520,000
Cost of goods sold..........................................................................
301,300
Gross profit....................................................................................
$218,700
Selling expenses............................................................................. $119,000
Administrative expenses............................................................... 52,100
171,100
Income from operations............................................................... $
47,600
b. Materials inventory:
Purchased materials..........................................................
$165,800
Less: Materials used in production.................................
147,600
Materials inventory, July 31............................................. $
18,200
Work in process inventory:
Materials used in production...........................................
$147,600
Direct labor........................................................................
96,250
Factory overhead (80% $96,250).................................
77,000
Additions to work in process............................................
$320,850
Less: Transferred to finished goods.................................
302,900
Work in process inventory, July 31................................. $
17,950

Finished goods inventory:


Transferred to finished goods.......................................... $302,900
Less: Cost of goods sold....................................................
301,300
Finished goods inventory, July 31................................... $
1,600

Prob. 192A

1. a. Materials.............................................................................. 137,000
Accounts Payable..........................................................
137,000
b. Work in Process.................................................................. 238,000
Factory Overhead............................................................... 53,600
Materials........................................................................
125,750
Wages Payable..............................................................
165,850
c. Factory Overhead............................................................... 4,950
Accounts Payable..........................................................
d. Factory Overhead............................................................... 3,700
Accumulated DepreciationMachinery
and Equipment.............................................................
e. Work in Process.................................................................. 71,179
Factory Overhead (1,343 hours $53).......................
f. Finished Goods................................................................... 177,204
Work in Process............................................................
177,204
Computation of cost of jobs finished:
Direct Direct Factory
Job Materials Labor Overhead Total
No. 601 $18,100 $17,000 $11,395 $ 46,495
No. 602 20,000 25,500 12,190 57,690
No. 603 13,050 9,700 9,275 32,025
No. 605 15,700 14,800 10,494 40,994
Total $177,204

g. Accounts Receivable........................................................... 236,030


Sales...............................................................................
236,030
Cost of Goods Sold............................................................. 145,179
Finished Goods.............................................................
145,179
Computation of cost of jobs sold:
Job
No. 601.................................................. $ 46,495
No. 602.................................................. 57,690
No. 605.................................................. 40,994
Total...................................................... $145,179

2.

Work in Process Finished Goods


(b) 238,000 (f) 177,204 (f) 177,204 (g) 145,179
(e) 71,179
Bal. 131,975 Bal. 32,025

3. Schedule of unfinished jobs:


Direct Direct Factory
Job Materials Labor Overhead Total
No. 604....................................... $34,500 $33,550 $15,900 $
83,950
No. 606....................................... 17,800 18,300 11,925
48,025
Balance of Work in
Process, April 30...................
$131,975

4. Schedule of completed jobs:


Direct Direct Factory
Job Materials Labor Overhead Total
Finished Goods, June 30
(Job 603)................................ $13,050 $9,700 $9,275
$32,025