BUS 704 – HOMEWORK 3 ASSIGNMENT: DUE FEBRUARY 22 at 5:30 PM

Abbott Lamp Corporation manufactures BOTH Mountain Dew Lamps AND Coca-Cola
Lamps, starts 1/1/20. On 1/1/20, Erin Rogers ESTIMATES the following MOH costs:
Utilities for manufacturing building $4,000
Grease for machines $1,200
Rent on manufacturing building $3,600
Depreciation on manufacturing machine $1,200
$10,000
Erin Rogers also estimates a total of 2,000 direct labor hours for the year and ALC
applies MOH costs using DLH (or direct labor hours).
1. Compute the Predetermined Overhead Rate.
2. On 1/1/20, ALC obtains a lamp-making machine for $6000 – on account. It has a
0 salvage value and a useful life of 5 years. Please give the journal entry to
describe this transaction.
3. On 1/1/20, ALC purchases – on account – 1000 Mountain Dew Cans for $10,000.
It also purchases – on account – 2000 Coca-Cola Cans for $40,000 and 1,000
pounds of grease for $80,000. Please give the journal entry to record this
transaction.
4. On 1/1/20, ALC purchases – on account – 1,000 pieces of paper for $10,000.
Please give the journal entry to describe this transaction.
5. On 1/5/20, ALC mountain dew lamp workers requisitioned out 100 Mountain dew
cans and 20 pieces of paper. Please give the journal entry to describe this
transaction.
6. On 1/5/20, ALC coca-cola lamp workers requisitioned out 200 coca-cola cans and
100 pieces of paper. Please give the journal entry to describe this transaction.
7. On 1/15/20, ALC mountain dew lamp workers requisitioned out 10 pounds of
grease (and remember, the grease helps to make BOTH Mountain Dew Lamps
and Coca-cola lamps). Please give the journal entry to describe this.
8. During January, ALC workers worked the following (AND PAID IN CASH):
a. Mountain Dew Lamp workers => 100 dlh and they are paid $10/dlh ;
b. Coca-Cola Lamp workers => 80 dlh and they are paid $25/dlh.
9. Please give the journal entry to APPLY overhead for the month of January.
10. Please create TWO January JOB COST SHEETS (one Mountain Dew Lamps;
one Coca-Cola Lamps) and compute cost per Mountain Dew Lamp and Coca
Cola lamp.
11. On 1/31, ALC receives its January utility bill for $1,000 and pays for it in CASH.
These utilities pertain to the manufacturing facility. Please give the journal entry.
12. On 1/31, ALC receives its monthly rent bill for its manufacturing facility for $300
and pays for it in CASH. This rent pertains to the manufacturing facility. Please
give the journal entry.
 13. On 1/31, ALC makes it monthly depreciation entry for the lamp-making
equipment. Straight line depreciation of a $6,000 asset over 5 years is $1,200 per
year or….$100 per month. Please give the appropriate depreciation journal entry
for the month of January.
14. On 1/31, ALC workers completed 100 Mountain Dew Lamps and 200 Coca-cola
lamps AND all 100/200 Mountain Dew/Coca-cola lamps were transferred to the
finished goods. To give the journal entry, utilize the two separate Job Cost Sheets
you completed earlier.
15. On 2/1, ALC sold all 100 Mountain Dew Lamps it made in January – on account
– for $50/lamp. Please give the journal entry.
16. On 2/1, ALC all sold 200 Coca-cola lamps it made in January – for CASH – for
$100/lamp. Please give the appropriate journal entry.

BUSM 704 HOMEWORK 4 ASSIGNMENT DUE MARCH 1, 2022 @

5:30 PM
RESULTS FOR THE REMAINDER OF THE YEAR
17. During February – December 31, ALC Mountain Dew Lamp workers,
requisitioned out 800 Mountain Dew Cans and 160 pieces of paper. Give the
journal entry to describe this transaction.

18. During February – December 31, ALC Coca-Cola Lamp workers requisitioned
out 600 Coca-Cola cans and 300 pieces of paper. Give the journal entry.
19. During February – December 31, ALC paid CASH the following to its workers:

Mountain Dew Lamp workers for direct labor (800 dlh * $10/dlh) $8,000
Coca-Cola Lamp workers (240 dlh * $25/dlh) $6,000
20. Give the journal entry to APPLY overhead from February – December 31.

21. The Mountain Dew Lamp workers started and completed all 800 Mountain Dew
Lamps from February – December 31. The 800 Mountain Dew Lamps were
transferred to finished goods. Give the journal entry to describe this transaction.
Once again, create a job cost sheet for these 800 mountain Dew lamps.
22. Coca-cola Lamp workers started and completed all 600 Coca-Cola Lamps from
February – December 31. The 600 Coca-cola Lamps were transferred to finished
goods. Give the journal entry to describe this transaction. Once again, create a
job cost sheet for these 600 Coca-cola lamps.
23. During February – December 31, ALC made 11 monthly depreciation journal
entries totaling $1,100 for its lamp-making equipment. Give the journal entry.

24. During February – December 31, ALC made 11 CASH payments for rent totaling
$3,300. Give the journal entry.
25. During February – December 31, ALC made 11 CASH payments for utilities
totaling $1,200. These utilities pertain to the manufacturing plant. Please give the
journal entry.

26. During February – December 31, ALC sold 500 Mountain Dew Lamps for
$50/lamp (or $25,000 total) in CASH. Give the journal entry to describe this
transaction.

27. During February – December 31, ALC sold 500 Coca-Cola Lamps for $100/lamp
(or $50,000) in CASH. Give the journal entry to describe this transaction.

28. During the year, ALC paid CASH for the following PERIOD COSTS:

Salaries at corporate headquarters $20,000

Rent on corporate headquarters $20,000

29. Create your MOH clearing t-account. Here are some hints:
a. Remember, the MOH clearing account will have a zero beginning balance.
b. Your MOH clearing account will have ACTUAL January MOH on the
debit side and APPLIED January MOH on the credit side. It will also
have ACTUAL February – December 31 MOH on the debit side and
APPLIED February – December 31 MOH on the credit side.

Is MOH OVER or UNDER-applied at 12/31? IF so, indicate by how much.

ACTUAL APPLIED
Beg. Balance 0

30. Please make the appropriate journal entry to close out any over/under-applied
MOH to COGS at 12/31.

31. Using your prior journal entries create a 5-line income statement for 2020 (I DO
NOT NEED A BALANCE SHEET). Your 5-line income statement should look
like this: