12-2B - Tully Corporations Kearney Plant In jacksonville, Florida, produces the companys weed-control chemical solution, weed terminator. Production begins with pure water from a controlled stream to which the plant adds different chemicals in the production process. Finally , the plant bottles the resulting chemical solution. the process is highly automated, with different computer controlled maneucvers and testing to ensure the quality of the end product. with only 15 employees, the plant can produce up to 6,000 bottles per day.

Required : Recommend the type of costing system (job-order, process or hybrid) Kearney Plant should use. Explain the recommendation.

12-13B - Preston Corp. was creatd on January 1, Year 1. It received a stockholders contribution of $92,000. It purchased $21,000 of raw materials and worked on three job orders during the year. Data about these jobs follow. (assume all transactions are for cash unless otherwise indicated.)

Job Direct Raw Materials Used direct labor

job 1 $8,000 $8,000

Job 2 3,600 9,600

Job 3 6,400 8,960

Total 18,000 26,560

The average wage rate is 32 dollars per hour. manufacturing overhead is applied using a predeterined overhead rate of 15 per direct labor hour. jobs 1 and 3 were completed during the year, and Job 1 was sold for 26000. preston paid 2800 for selling and admistrative expenses. actual factory overhead was 12000.

A: required: record the events in a horizontal statement model the first even for year 1 has been recorded as an example

balance sheet income statement

cash + aw m + MOH + wip + F. Goods = c.stk. + Retain Earn rev - Exp = net Inc

B: reeconcile all subsidiary accounts with their respective control accounts.

C: record the closing entry for over or underapplied manufacturing ocverhead , assuming that the amount is significant

D: prepare a schedule of cost of goods manufactured and sold, an income statement , and a balance sheet for Year 1 .

12- 17 B

Letcher corp makes blue jeans. its process invloves two departments, cutting and sewing. the following data pertain to the cutting deaprtment transactions in year 2.

1. beginning balance in work in procss inventory was 30,000. this invetory consisted of fabric of 7000 pairs of jeans. the beginning balances in raw materials invntory, production supplies, and cash were 224,000, 20,800 and 286,000 respectively.

2. direct materials costing 167,000 were issued to the cutting department, this amount of materials was sufficient to start work on 21000 pairs of jeans.

3. direct labor cost was 144000 and indirect labor cost was 32400. all labor costs were paid in cash.

4. the predetermined overhead rate was .45 per direct labor dollar.

5. actual overhead costs other than indirect materials and indirect labor for the year amounted to 12000, which was paid in cash.

6. the cutting department completed cutting 20000 pairs of jeans. the remaining jeans were 40 percent complete.

7. the completed units of cut fabric were transferred to the sewing department.

8. all of the productions supplies had been used by the end of the year.

9. over or unerapplied overhead was closed to the cost of goods sold account

required:

a. determine the number of equivalent units of production

b. determine the product cost per equivalent unit

c. allocate the total cost between ending work in process inventory and units transferred to the sewing department

d. record the transactions in a partial set of t-accounts.