Your manager asks you to bring the following incomplete accounts of Endeavor Printing, Inc., up to date
Question:
Your manager asks you to bring the following incomplete accounts of Endeavor Printing, Inc., up to date through January 31, 2017. Consider the data that appear in the T-accounts as well as the following information in items (a) through (j).
Endeavor’s normal-costing system has two direct-cost categories (direct material costs and direct manufacturing labor costs) and one indirect-cost pool (manufacturing overhead costs, which are allocated using direct manufacturing labor costs).
Additional information follows:
a. Manufacturing overhead is allocated using a budgeted rate that is set every December.
You forecast next year’s manufacturing overhead costs and next year’s direct manufacturing labor costs. The budget for 2017 is \($1,200,000\) for manufacturing overhead costs and \($800,000\) for direct manufacturing labor costs.
b. The only job unfinished on January 31, 2017, is No. 419, on which direct manufacturing labor costs are \($4,000\) (250 direct manufacturing labor-hours) and direct material costs are \($16,000\).
c. Total direct materials issued to production during January 2017 are \($180,000\).
d. Cost of goods completed during January is \($360,000\).
e. Materials inventory as of January 31, 2017, is \($40,000\).
f. Finished-goods inventory as of January 31, 2017, is \($30,000\).
g. All plant workers earn the same wage rate. Direct manufacturing labor-hours used for January total 5,000 hours. Other labor costs total \($20,000\).
h. The gross plant payroll paid in January equals \($104,000.\) Ignore withholdings.
i. All “actual” manufacturing overhead cost incurred during January has already been posted.
j. All materials are direct materials.
Calculate the following:
1. Materials purchased during January
2. Cost of Goods Sold during January
3. Direct manufacturing labor costs incurred during January
4. Manufacturing Overhead Allocated during January
5. Balance, Wages Payable Control, December 31, 2016
6. Balance, Work-in-Process Control, January 31, 2017
7. Balance, Work-in-Process Control, December 31, 2016
8. Manufacturing Overhead Underallocated or Overallocated for January 2017
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