168 169 Exhibit 3 170 Actual Machine and Labor hours - by Job and Department 171 172 Cutting Tooling Assembly 173 Machine hours 174 JOB XY200 200 1,400 275 175 JOB AP5000 600 600 100 176 JOB QE3000 500 400 75 177 JOB ME2000 600 300 50 178 Total 1,900 2,700 500 179 180 Direct Labor Hours Total 181 JOB XY200 210 210 182 JOB AP5000 70 100 110 280 183 JOB QE3000 210 130 510 850 184 JOB ME2000 1,100 1100 185 Total 490 230 1720 2440 186 187 5 #2 22 6 7 8 Materials Accounts Payable To record materials purchased 9 #3 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 29 #5 30 31 32 BRUTALETES222222222222 To record materials issued #4 To record EE wages To record ER payroll taxes To record Misc. expenses $95,885.00 $95,885.00 86 87 88 Task #7: Calculate the applied overhead for each job. See exhibit 3 for breakdown of machine and labor hours by job. Record the journal entry. Update the Job Cost Sheets. Task #8: Overhead expenses of the support departments are allocated to the producing departments using the sequential method, with the higher dollar support department being allocated first. Janitorial services are allocated based on square footage of each department, and Maintenance services are split equally. Calculate the allocation and record the journal entry. Round all dollars allocated to the nearest cent and all percentages to 4 decimal places. 89 Task #9: Jobs TG1000, RW3000, and XY200 were delivered to customers during the month, sales terms n/15. Sale 90 price is 30% markup over cost. Job AP5000 was finished during the month. 91 92 Task #10: $250,000 in cash is received from customers on account during the month. 93 94 Task #11: $120,000 in various Accounts Payables were paid during the month. 95 96 97 98 Task #12: Create a Balance Sheet, Income Statement, and Statement of Goods Manufactured, and Cost of Goods Sold. For purposes of these financial statements, create a reclassing journal entry to roll all the various Overhead Control accounts into one Over/Under Applied Overhead account that will appear on the Balance Sheet (Other Asset if it is a Debit, Other Liability if it is a Credit). Note that if this was the final Balance Sheet for the year we would actually close the account and not show it at all. 1 Task #5: Other miscellaneous activity includes: 2 a) Paid Utilities on the factory building of 3 74 75 76 77 78 79 b) Paid Selling and administrative expenses of $10,000.00 $5,000.00 c) Paid FICA, FUTA, SUTA, and Federal Income Taxes withheld as of the end of last year. d) Monthly depreciation on plant assets were calculated. On an annual basis, the company writes off (rounded to the nearest dollar): 5 percent - Factory buildings 20 percent - Machinery and Equipmer 20 percent - Office Equipment e) Adjust the balance of the prepaid insurance account, which represents a two-year premium for a fire insurance policy covering the factory building and machinery. It was paid on the last day of the preceding month and became effective on January 1. (Round your journal entry to the nearest dollar.) 80 81 82 Task #5-Record the journal entry for letters a thru e above. 83 Task #6: Post all above journal entries. Review the balance of the Factory Overhead Account. See Exhibit 4 for detail of that account by department. 84 To better evaluate how well overhead costs were controlled, record a journal entry to empty out the general Overhead 85 Control Account and create 5 new ones (one for each department...e.g. Overhead Control - Cutting). 9 Exhibit 4 1 Factory Overhead - by Department Producing Departments 2 3 4 Supplies 5 Indirect Labor Cutting Tooling Assembly Janitorial Service Departments Maintenance Total $450.00 $300.00 $280.00 $175.00 $295.00 $1,500.00 $2,000.00 $2,000.00 $2,000.00 $3,000.00 $5,000.00 $14,000.00 6 Payroll Taxes $1,324.39 $621.65 $4,648.86 $229.50 $1,082.50 $7,906.90 7 Miscellaneous $3,000.00 $2,750.00 $2,500.00 $750.00 $1,000.00 $10,000.00 8 Depreciation $863.00 $1,190.00 $600.00 $180.00 $150.00 $2,983.00 99 Insurance $1,805.00 $892.00 $1,425.00 $125.00 $100.00 $4,347.00 00 $9,442.39 $7,753.65 $11,453.86 $4,459.50 $7,627.50 $40,736.90 01 check figure D2 square feet 7,530 5,000 10,000 1,000 2,000 03 04 05 06 07 146 147 148 Account: Materials 149 150 Description Units Unit Cost Total 151 Material A 120 $15.25 $1,830.00 152 Material A 150 $15.35 $2,302.50 153 154 Material B 100 $10.00 $1,000.00 155 Material B 150 $9.95 $1,492.50 156 Material B 200 $9.90 $1,980.00 157 158 Material C 105 $50.00 $5,250.00 159 Material C 125 $52.00 $6,500.00 160 161 Material D 1100 $75.00 $82,500.00 162 163 Material E 800 $15.18 $12,144.00 164 165 $114,999.00 166 Misc Factory Su 167 $2,001.00 $117,000.00 54 55 Task #4: An analysis of Time Cards for the employees showed the following hours 56 57 Job XY200 Job AP5000 Job QE3000 Job ME2000 58 Line Worker #1 210 180 250 200 per hr $15.00 59 Line Worker #2 100 300 400 $25.00 60 Line Worker #3 300 500 $35.00 61 Factory Supervisor (equal time to 3 Producing Departments) 62 Factory Janitorial Staff 63 Factory Maintenance Staff 64 Administrative 65 $ SSSS 6,000 $ 3,000 $ 5,000 12,000 Assume FICA rates are 6.2% + 1.45% = 7.65% and Employee Income Tax Withholding is at 10% of wages. Assume FUTA 66 and SUTA rates of 4% and 1% respectively on the first $10,000 of wages. 67 Task #4-Record the Journal Entries for wages. Then, record any payroll taxes due. 68 Update the Job Cost Sheets for labor (round to the nearest cent) 69 70 5 Material A 6 Purchases units price total units 8 9 10 Used Ending Inventory Beginning Ending Summary by Job price total $ job units price total 120 $15.25 $1,830.00 150 $15.35 $2,302.50 $4,132.50 Material A Summary Job XY200 $ Job AP5000 $ 11 12 Job QE3000 S Job ME2000 S 13 14 15 16 17 18 19 20 Material B Purchases Used 21 units price total units price Total $ job units Ending Inventory price total 2222222222232 24 25 26 27 28 29 30 31 33 34 35 36 37 100 $10.00 $1,000.00 150 $9.95 $1,492.50 200 $9.90 $1,980.00 Material B Summary $4,472.50 Job XY200 $ Job AP5000 S Job QE3000 $ Job ME2000 $ B D E F G H 60 #7 61 62 63 64 To record applied overhead 65 66 #8 67 68 69 70 71 To close Maintenance 72 73 74 75 76 77 To Close Janitorial 78 79 #9 80 81 To record Job XY200 and AP5000 completed 82 83 84 85 86 87 88 To record Job TG1000 and RW3000 and XY200 sold 128 Exhibit 2 129 Account: Finished Goods 130 131 Job TG1000 Job RW3000 Total 132 Direct Materials $10,000 $30,000 $40,000 133 Direct Labor $15,000 $37,750 $52,750 134 Factory Overhea $4,000 $12,000 $16,000 135 $29,000 $79,750 $108,750 136 137 138 Account: Work in Process 139 140 Job XY200 Job AP5000 Total 141 Direct Materials $9,000 $40,000 $49,000 142 Direct Labor $6,000 $19,200 $25,200 143 Factory Overhea $5,400 $24,000 $29,400 144 $20,400 $83,200 $103,600 145 A B C D G H Task #3: In January, in addition to $1,500 of Misc Factory Supplies, the following materials were issued to the factory: In Units Material A 5-Jan Job XY200 10-Jan Job AP5000 15-Jan Job QE3000 20-Jan Job ME2000 25 100 50 Material B 25 100 200 300 Material C 200 50 Material D 30 300 400 300 Material E 300 400 Task #3-Looking at both the purchases on the prior page and the materials issued above, update the Materials Inventory Worksheet, focusing on one material at a time and paying attention to when the material was purchased and used. Using the summary at the bottom of that worksheet, create one Journal Entry to summarize all materials issued to the factory for the entire month. Remember indirect materials are not WIP Update the Job Cost Sheets for Materials (round to the nearest cent) B #10 #11 To record cash received from customers #12 To record cash paid to vendors To reclass over/under accounts into one for financial stmts 38 Material C Purchases Used Ending Inventory 59 units price total units price Total $ job units 40 #41 105 125 price total $50.00 $5,250.00 $52.00 $6,500.00 Material C Summary $11,750.00 Job XY200 $ 42 43 44 Job AP5000 S Job QE3000 Job ME2000 $ S 45 46 47 48 49 50 51 52 53 Material D Purchases Used Ending Inventory 54 units price total units price Total $ job 55 units 1100 price total $75.00 $82,500.00 $82,500.00 56 57 58 59 60 Material D Summary Job XY200 $ Job AP5000 $ Job QE3000 $ Job ME2000 $ 61 62 63 64 65 66 67 68 Material E Purchases Used Ending Inventory 69 units price total units price Total S job 70 units 800 price total $15.18 $12,144.00 $12,144.00 Material E Summary 71 Job XY200 $ Job AP5000 S 72 Job QE3000 S 73 Job ME2000 S 74 75 76 77 78 79 80 100 101 102 103 104 105 106 Cash 107 Accounts Receivable 108 Finished Goods Exhibit 1 Koushirou Incorporated Post-Closing Trial Balance December 31, 2019 Debit Credit 122,500 121,700 108,750 109 Work in Process 110 Materials 103,600 117,000 111 Prepaid Insurance 104,320 112 Factory Building 164,000 113 Accumulated Depr - Factory Building 122,500 114 Machinery and Equipment 138,000 115 Accumulated Depr - Machinery and Equip 116,000 116 Office Equipment 110,500 117 Accumulated Depr - Office Equipment 107,500 118 Accounts Payable 102,500 119 FICA Tax Payable 7,500 120 FUTA Payable 500 121 SUTA Payable 122 Employee Income Tax Payable 123 Capital Stock 124 Retained Earnings 125 100 10,000 75,000 548,770 1,090,370 1,090,370 126 2 3 4 5 6 Koushirou Incorporated manufactures special made to order construction equipment. It has three production departments (Cutting, Tooling, and Assembly) and two service departments (Janitorial and Maintenance). In any production department, the job in process is wholly completed before the next job is started. The company operates on a calendar year. The company uses job order costing since each job is unique. Job names are assigned using a two letter code for the company combined with the number of units contracted for. Before beginning, notice Exhibit 1 and 2 included in this company information: Exhibit 1 shows a post-closing trial balance as of December 31, 2019 Exhibit 2 shows subsidiary ledgers for the Finished Goods, Work in Process, and Materials accounts. The company uses the FIFO method of Accounting for all inventory. Task #1: The company uses departmental overhead rates. Cutting and Tooling use machine hours. Assembly uses direct labor hours. In December of the year just completed, the company estimated the new year's overhead related 7 activity as follows: 8 9 Machine hours o Direct Labor Hours 1 Estimated Annual O/H 22 23 24 25 Cutting Tooling Assembly Total 30,000 3,000 $195,000 25,000 4,000 $100,000 7,500 15,000 $150,000 62,500 22,000 $445,000 Task #1-calculate the predetermined overhead rates to be used during the year and make note of them. Then continue on to the next task. Task #2: In January of the new year, the company purchased the following Miscellaneous factory supplies and materials: Material Factory Supplies Amount $5,000 Date 1-Jan Material A 150 @ $16.9 7-Jan Material B 400 @ $12 12-Jan Material C 150 @ $65 18-Jan Material D 900 @ $72 18-Jan Material E 500 @ $18 25-Jan Task #2-for simplicity's sake for this fake company, do one journal entry to record the full amount of the purchases. Remember to review your Trial Balance as of Dec 31 for an idea of what account titles you have to use. Assume purchases are paid for in the month following the purchase. A B C D E F G H 1 Job Cost Record 2 3 Job Number Date Promised: 4 Customer Name Date Started: 5 Job Description Date Completed: 6 7 Direct Materials Direct Labor Factory Overhead 8 Date Req # Amount Time Ticket Amount Date Rate Amount 9 Beg Bal 10 11 12 13 4 15 16 17 Overall Cost Summary 18 Direct Materials........... 19 20 21 Direct Labor................. Factory Overhead....... Total Job Cost................ 22 23 0 0 0 0 29 #5 30 31 32 To record Misc. expenses 33 34 35 36 37 38 39 To record payment of prior month payables 40 41 42 43 44 45 46 To record depreciation 47 48 49 50 To record expired insurance 51 52 #6 53 54 55 56 57 58 To reclass into separate control accounts