12/9/2019
CengageNOWv2 | Online teaching and learning resource from Cengage Learning
Analyzing Manufacturing Cost Accounts
Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized
for June:
Materials
June 1
Balance
34,000 June 30
June 30
Purchases
June 1
Balance
(B) June 30
June 30
Materials
(C)
June 30
Direct labor
(D)
June 30
Factory overhead applied
(E)
June 1
Balance
June 30
Completed jobs
Requisitions
(A)
Completed jobs
(F)
Cost of goods sold
(G)
136,600
Work in Process
Finished Goods
0 June 30
(F)
Wages Payable
June 30
Wages incurred
117,500
Factory Overhead
June 1
Balance
June 30
Indirect labor
22,200 June 30
June 30
Indirect materials
18,200
June 30
Other overhead
70,400
Factory overhead applied
(E)
(H)
In addition, the following information is available:
a. Materials and direct labor were applied to six jobs in June:
Job No.
Style Quantity Direct Materials Direct Labor
201
T100
190
$21,760
$15,000
202
T200
420
40,080
27,000
203
T400
170
13,650
6,000
204
S200
280
40,200
27,000
205
T300
170
23,140
16,000
206
S100
100
6,500
3,000
1,330
$145,330
$94,000
Total
b. Factory overhead is applied to each job at a rate of 140% of direct labor cost.
c. The June 1 Work in Process balance consisted of two jobs, as follows:
Job No. Style Work in Process, June 1
201
T100
202
T200
$5,700
16,500
$22,200
Total
d. Customer jobs completed and units sold in June were as follows:
Job No. Style Completed in June Units Sold in June
201
T100
X
152
202
T200
X
336
203
T400
204
S200
X
235
205
T300
X
141
206
S100
0
0
1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter
in "0". Enter all amounts as positive numbers.
https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=assignments&takeAssignmentSessionLocator=assignment-take&in…
1/2
12/9/2019
CengageNOWv2 | Online teaching and learning resource from Cengage Learning
June 1
Job
Quantity
No.
Work in
Process
No.
201
No.
202
No.
203
No.
204
No.
205
No.
206
Total
Direct
Direct
Factory
Materials
Labor
Overhead
$
190
✔
$ 5,700
$ 21,760
420
✔
16,500
40,080
27,000
170
✔
13,650
6,000
280
✔
40,200
27,000
170
✔
23,140
16,000
100
✔
6,500
3,000
1,330
✔
$145,330
$94,000
$22,200
15,000
Total Cost
$
$
$
$
Unit Cost
$
a. Materials requisitions $
22,200
b. Work in process beginning balance $
c. Direct materials $
d. Direct labor $
145,330
94,000
✔
✔
✔
e. Factory overhead applied $
f. Completed jobs $
g. Cost of goods sold $
h. Indirect labor $
2. Determine the June 30 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.
Materials
$
Work in process
$
Finished goods
$
✖
Factory overhead $
Feedback
Check My Work
1.
a & c. Direct and indirect materials are requisitioned. Direct materials are recorded in work in process and indirect materials are recorded in factory overhead.
b. The beginning work in process information is given.
d, e & h. Direct labor cost information is given. Overhead is applied based on direct labor cost.
f & g. Beginning work in process balances plus all current period manufacturing costs are included in the cost of completed jobs and jobs sold.
2. Insert your amounts calculated in (1) into the T accounts. Then determine the ending balances.
https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=assignments&takeAssignmentSessionLocator=assignment-take&in…
2/2