normal versus standard eost, with balanee sheet Sweet Produets (SP) manufaetures severaI types of somewhat eustomized reereation produets, partly to order and partly for stock. Job order costing is employed. SP's balanee sheet as of 8/3l/yrl is as follows:

Balanee Sheet, as of 8/31/yrl eash accounts reeeivable raw material inventory work-in-proeess inventory plant and equipment (net)

$ 23,000 aeeounts payable 12,000 wages payable 8,000 11,000 47,000

$101,000 capital stock retained earnings

$ 21,000 14,000 5,000 61,000

$101,000 The work-in-proeess inventory consists entirely of job #112, whieh is roughly half completed.

Forproduet costing purposes, SP uses nonnal, full costing with a predetennined overhead rate of 150% of direet labor eost. Any end-of-month over or underabsorbed overhead is elosed to the income statement, as a separate line item. During the month 9/l/yrl to 9/30/yrl, the following transactions took place.

(1) Purehased raw material on aecount for 35,000.

(2) Issued materials from inventory as follows:

direet materials: job #112 direet materials: job #113 direet materials: job #114 indireet materiaIs:

(3) Aecmed wages and salaries as follows:

4,300 9,500 8,800 13,500 direet labor: job #112 9,000 direet labor: job #113 17,500 direet labor: job #114 12,500 indireet Iabor and faetory supervision: 24,500 general offiee salaries: 42,000

(4) Other manufaeturing costs (all eredited to accounts payabIe): 22,000

(5) Equipment depreeiation:

plant: 3,000 offiee: 1,000

(6) Miscellaneous period costs: 3,000 (again eredit aecounts payable)

(7) Jobs finished during month: #112 and #113

(8) Sales during month (all on aecount):

#112 #113 (9) Cash received (from customers):
(10) Cash paid:
45,000 115,000 130,000 accounts payable: 45,000 wages: 100,000 165 Notiee that payroll withholding, various fringe benefits, and taxes are omitted, all to keep the exereise within a reasonable time frame.
a] Prepare an ending balanee sheet and an ineome statement for the period 9/l/yrl to 9/30/yrl.
b] Prepare beginning and ending balanee sheets and an ineome statement using a standard, full eost system. For this purpose, you should assume the following: (i)
raw material inventory is maintained at aetual price (for eonvenienee); (ii) the standard eost of the beginning work-in-process inventory is 10,000; (iii) the faetory overhead budget is OV = 50,000 + .5( direet labor dollars), with anarmaI volume of 50,000 direet labor dollars; and (iv) the standard direet eosts of work accomplished during the month in question are:
direet labor direet material job #112 10,000 4,000 job #113 18,000 9,000 job #114 14,000 12,000 e] Prepare beginning and ending balanee sheets and an ineome statement using a standard, variable eost system. Here you should assume the beginning work in proeess Gob #112) under the standard, tuli eost system eonsists of 5,000 direet material, 2,000 direet labor, and applied overhead.AppendixLO1