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EXERCISE 3-11

(a) 1.

$15,500, or ($5,000 + $6,000 + $4,500).

2. Last year 75%, or ($4,500 $6,000); this year 80% (either


$6,400 $8,000 or $3,200 $4,000).
(b) Jan. 31

31

31

31

Work in Process Inventory .......................


Raw Materials Inventory ...................

8,000

Work in Process Inventory .......................


Factory Labour ..................................

12,000

Work in Process Inventory .......................


Manufacturing Overhead ..................

9,600

Finished Goods Inventory ........................


Work in Process Inventory ...............

45,100

8,000

12,000

9,600

45,100

EXERCISE 3-17
(a)

HANNIFAN MANUFACTURING COMPANY


Cost of Goods Manufactured Schedule
For the Month Ended May 31, 2009
Work in process, May 1 ........................................
Direct materials used ............................................
Direct labour ..........................................................
Manufacturing overhead applied .........................
Total manufacturing costs ............................
Total cost of work in process ...............................
Less: Work in process, May 31 ...........................
Cost of goods manufactured................................

$ 14,700
$62,400
32,000
40,000
134,400
149,100
17,900
$131,200

EXERCISE 3-17 (Continued)


(b)

HANNIFAN MANUFACTURING COMPANY


(Partial) Income Statement
For the Month Ended May 31, 2009
Sales ....................................................................
Cost of goods sold
Finished goods, May 1 ...............................
Cost of goods manufactured .....................
Cost of goods available for sale ................
Less: Finished goods, May 31 ..................
Cost of goods sold .............................
Gross profit .........................................................

$200,000
$ 12,600
131,200
143,800
9,500
134,300
$ 65,700

(c) In the May 31 balance sheet, the manufacturing inventories will


be reported in current assets as follows:
Finished goods ....................................................
$9,500
Work in process ..................................................
17,900
Raw materials ......................................................
7,100
EXERCISE 3-20
(a)

Gonzalez
Direct materials
$ 600
Auditor labour costs
5,400
Applied overhead
3,960
Total cost
$9,960

Navarro
$ 400
6,600
4,840
$11,840

Rojas
$ 200
3,375
2,475
$6,050

(b) The Gonzalez job is the only incomplete job, therefore, $9,960.
(c) Actual overhead
Applied overhead
Balance

$12,000 (DR)
11,275 (CR)
$ 725 (DR)

PROBLEM 3-23A
(a) $1,050,000 $700,000 direct labour costs = 150% of direct labour
costs
(b) See solution to part (e) for job cost sheets
(c) Raw Materials Inventory ............................................
Accounts Payable ...............................................

90,000

Factory Labour ...........................................................


Factory Wages Payable......................................
Employer Payroll Taxes Payable.......................

65,000

Manufacturing Overhead ...........................................


Accounts Payable ...............................................
Accumulated Amortization ................................
Raw Materials Inventory.....................................
Factory Labour....................................................

71,000

(d) Work in Process Inventory ........................................


Raw Materials Inventory.....................................
($10,000 + $39,000 + $30,000)

79,000

Work in Process Inventory ........................................


Factory Labour....................................................
($5,000 + $25,000 + $20,000)

50,000

Work in Process Inventory ........................................


Manufacturing Overhead ...................................
($50,000 X 150% of direct labour costs)

75,000

(e) See next page for postings to job cost sheets.

90,000

49,000
16,000

20,000
19,000
17,000
15,000

79,000

50,000

75,000

PROBLEM 3-23A (Continued)


(b)&(e)

Job Cost Sheets

Job No. 50
Date

Direct Materials

Direct
Labour

Manufacturing Overhead

Beg.
Jan.

$20,000
10,000
$30,000

$12,000
5,000
$17,000

*$16,000*
* 7,500*
*$23,500*

Cost of completed job


Direct materials ..............................................................
Direct labour ...................................................................
Manufacturing overhead ................................................
Total cost ................................................................................

$30,000
17,000
23,500
$70,500

*$5,000 X 150%
Job No. 51
Date

Direct Materials

Direct
Labour

Manufacturing Overhead

Jan.

$39,000
$39,000

$25,000
$25,000

**$37,500**
**$37,500**

Cost of completed job


Direct materials ............................................................... $ 39,000
Direct labour ....................................................................
25,000
Manufacturing overhead .................................................
37,500
Total cost ................................................................................. $101,500
**$25,000 X 150%
Job No. 52
Date

Direct Materials

Direct
Labour

Manufacturing Overhead

Jan.

$30,000

$20,000

***$30,000***

***$20,000 X 150%

PROBLEM 3-23A (Continued)

(f)

Finished Goods Inventory .......................................


Work in Process Inventory ..............................
($70,500 + $101,500)

172,000

Cost of Goods Sold ..................................................


Finished Goods Inventory ...............................
($90,000 + $70,500)

160,500

Accounts Receivable ...............................................


Sales ..................................................................
($122,000 + $158,000)

280,000

(g)
Beginning balance
Cost of completed jobs 50 and 51
Ending balance

Finished
Goods Inventory
90,000 160,500
172,000
101,500

172,000

160,500

280,000

Cost of jobs 49 and 50 sold

The balance in this account consists of the cost of completed Job


No. 51 which has not yet been sold.
(h) Manufacturing Overhead
Actual
Applied
71,000
75,000
4,000
The balance indicates
overapplied by $4,000.

that

manufacturing

overhead

was

PROBLEM 3-30A

(a) $7,600

($18,850 + $7,975 $19,225).

(b) $36,750
data).

[$9,750 + $15,000 + (80% X $15,000)]. (Given in other

(c) $16,950

($18,850 $1,900).

(d) $7,040

($8,800 X 80%).

(e) $12,440

[Given in other data$3,800 + $4,800 + (80% + $4,800)].

(f)

($36,750 + $16,950 + $8,800 + $7,040 $12,440).

$57,100

(g) $5,000

(Given in other data).

(h) $57,100

(See (f) above).

(i)

$58,100

($5,000 + $57,100 $4,000).

(j)

$4,000

(Given in other data).

(k) $12,465

(Equal to factory labour incurred).

(l)

($12,465 $8,800).

$3,665

(m) $7,040

($6,810* + $230) or (Same as (d)).

*$1,900 + $3,665 + $1,245

PROBLEM 3-37B
(a) Check the relationship between direct labour and factory
overhead applied for several of the jobs to see what the
overhead rate is:
Job 43: $288 $360 = 80% of direct labour cost.
Job 44: $792 $990 = 80% of direct labour cost.
Job 47: $680 $850 = 80% of direct labour cost.
The predetermined overhead rate is 80% of direct labour costs.
(b)

Total factory overhead applied


Less: beginning overhead
Overhead applied during the month
Less: over-applied overhead
Total factory overhead incurred

(1)

(c)

(d)

Work in process, beginning


Less: direct labour
Less: overhead applied
($150 x 80%)
Direct material

$2,832
120 (1)
2,712
600
$2,112

$570
150
120
$300

Direct materials shown on the job sheets


(Jobs 43 to 48)
Less: Direct materials in beginning WIP
Direct materials put into production in June

$4,190
300 (1) above
$3,890

Direct labour shown on the job sheets


(Jobs 43 to 48)
Less: Direct labour in beginning WIP
Direct labour costs incurred in June

$3,540
150 (given)
$3,390

PROBLEM 3-37 (Continued)


(e)

(f)

Work in process inventory, June 1


Plus: manufacturing costs
Direct material
Direct labour
Factory overhead applied
Total manufacturing costs
Less: Work in process inventory, June 30
Cost of goods manufactured for June
Finished goods inventory, June 1
Plus: Cost of goods manufactured
Cost of goods available for sale
Less: Finished goods inventory, June 30
Cost of goods sold

$
$3,890
3,390
2,712

$ 2,550
10,085
12,635
3,550
$9,085

570

9,992
10,562
477
$10,085

CASE 3-44
(a) Costs assigned o Jobs 101 & 111:
Job 101
Prior to July:
Direct materials
Direct labour

$ 9,000
2,000

$ 600
100

Overhead applied 1
Added in July:
Direct materials
Direct labour

2,400

120

1,000

500
3,000

Overhead applied 1

1,200
$15,600

3,600
$7,920

(b)

(c)

Job 111

Direct labour cost X 120%


Direct Materials Inventory
Beg Bal
3,000 4,900 Used
Purchases 6,000
End Bal
4,100
Work in Process, ending
Job 103
Beginning balance
$ 5,800
Material added
3,600
Labour added
3,800
Overhead applied
4,560
$17,760

(1) Direct Material


Direct Labour
Overhead applied-(120% of direct labour cost)
Total

(1)
(2)
(3)
(4)

Job 115
$ 800
200
240
$1,240
$ 2,500
1,500
1,800
$ 5,800

Total
$ 5,800
4,400
4,000
4,800
$19,000

CASE 3-44 (Continued)


(2) Total material used
Less: Jobs 111 & 115
Material added to Job 103

$ 4,900
1,300
$ 3,600

(3) Total direct labour used


Less: Jobs 101, 111, & 115
Labour added to Job 103

$ 8,000
4,200
$ 3,800

(4) Overhead applied =


Direct labour cost X 120%

(d)

Finished Goods Inventory


Beg Bal
18,000 18,000 Cost of Sales
Completed* 23,520
End Bal
23,520
* Job 101, $15,600 + Job 111, $7,920