Determine the assignment of costs to costs of goods
Managerial Accounting
The gross earnings of the factory workers for Darlinda Company during the month of January are $80,000 The employer’s payroll taxes for the factory payroll are $8,000 The fringe benefits to be paid by the employer on this payroll are $4,000 Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributed to indirect labor.
(a) Prepare the entry to record the factory labor costs for the month of January.
(b) Prepare the entry to assign factory labor to production.
Question 2: At May 31, 2005, the accounts of Yellow Knife Manufacturing Company show the following:
1. May 1 inventories – Finished Goods
Work in Process
Raw Materials
2. May 31 inventories – Finished Goods
Work in Process
Raw Materials
3. Debit postings to work in process were:
Direct Materials
Direct Labor
Manufacturing Overhead Applied
4. Sales totaled
(a) Prepare a condensed cost of goods manufactured schedule.
(b) Prepare an income statement for May through gross profit.
(c) In the area below, indicate the balance sheet presentation of the manufacturing inventories at May 31, 2005.
Question 3: Freedo Company’s fiscal year ends on June 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year.
1. On July 1, two jobs were in process: Job No. 4085 with costs of $19,000
Job No. 4086 with costs of $8,200
2. During July, Job Nos. 4087, 4088, and 4089 were started. On July 31, only Job No. 4089 was unfinished. This job had charges for direct
materials $2,000 and direct labor $1,000 plus manufacturing overhead. Manufacturing overhead was applied at the rate of 130% of direct labor.
3. On July 1, Job No. 4084, costing $135,000 was in the finished goods warehouse. On July 31, Job No. 4088, costing $143,000
was in finished goods.
4. Overhead was $3,000 underapplied in July.
Question 4: Greenleaf Manufacturing Company has two production departments: Cutting and Assembly. August 1 inventories are:
Raw Materials $4,200
Work in Process-Cutting $3,900
Finished Goods $31,900 Work in Process-Assembly $10,600
During August, the following transactions occurred:
Instructions:
During August, the following transactions occurred. Journalize these transactions. (Omit explanations.)
Question 5: The Polishing Department of Dimetry Manufacturing Company has the following production and manufacturing costs data for October. Materials are entered at the beginning of the process.
Production: Beginning inventory 1,600 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 11,000 Ending inventory of 2,000 units 10% complete as to conversion costs.
Manufacturing costs: Beginning inventory costs, comprised of $20,000 of materials and $43,180 of conversion costs;
material costs added in Polishing during the month, $162,700 labor and overhead applied in Polishing during the month $100,080 and $250,940 respectively.
Instructions:
(a) Compute the equivalent units of production for materials and conversion costs for the month of October.
(b) Compute the unit cost for materials and conversion costs for the month.
(c) Determine the costs to be assigned to the units transferred out and in process.
Question 6:, Elite Company has several processing departments. Costs charged to the Assembly Department for October 2005 totaled
$1,328,000 as follows:
Production records show that 35,000 units were in beginning work in process 40% complete as to conversion costs, 415,000 units were started into production, and 45,000 units were in ending work in process 20% complete as to conversion costs. Materials are entered at the beginning of each process.
