ACCT 3022 - FALL 2021 Job Order Costing - Group Project BEGINNING POSITION: Betty Inc. is a small producer of custom backyard play structures in London, Ontario. It uses a job order costing system because each play structure is custom build for its owner and therefore receives varying attention and effort from the two departments, building and finishing. Betty Inc. uses a perpetual inventory system. Betty Inc. had the following post-closing trial balance as of December 31, 2020: Cash $30,888 Accounts Receivable 22,420 Raw Materials Inventory ? Work in Process Inventory ? Finished Goods Inventory ? Unexpired Insurance 10,321 Office Equipment 33,000 Accumulated amortization - Office Equipment $3,300 Factory Equipment 642,000 Accumulated Amortization - Factory Equipment 270,000 Accounts Payable 21,333 Wages and Salaries Payable 1,000 Accrued Utilities 2,000 Accrued Property Taxes 3,000 Capital Stock 162,000 Retained Earnings ? ? ? Detail in Subsidiary Records As of December 31, 2020 I Nork in process: Job order Dep't Number Direct Materials Direct Labour Factory Overhead Total Cost 19-17 Building $2,600.00 $1,046.00 $1,300.00 $4,946.00 Finishing $325.00 $300.00 $222.00 $847.00 $5,793,00 Finished goods: Stock # Reference Quantity Unit Cost Total Cost X-1 X-2 Job 19-15 Job 19-16 230.00 810.00 80.00 18.00 $? $? $? Raw materials: RM Type Quantity Unit Cost Total Cost B 5,005 11.250 666 ? ? ? (A) (B) (C) ? ? ? Supplies Various $2,187.00 ? 'Labour costs and overhead costs: The hourly rate including benefits for Building is $ L(D) and for finishing is $__(E). To cost jobs as they are worked on, a predetermined or budgeted overhead rate was computed for 2021 based on the following budgeted cost drivers: Building department 50,200 machine hours Finishing department $172,000 of direct labour These overhead rates will be used throughout the year by each department. All overhead will be applied to all jobs worked on during the year in proportion to the machine-hour and/or direct-labour cost devoted to each job. Betty Inc. rents its factory building. This budget was prepared after careful consideration of the sales outlook for the coming year. The forecasted budget consisted of the following items: Betty Inc. Factory Overhead Budget For The Year Ended December 31, 2021 Building Finishing Total Variable costs: Supplies Indirect Labour Utilities Repairs Misc. $14,200 22,800 30,000 24,000 19,000 110,000 $5,400 16,800 8,000 6,000 11,000 47,200 $19,600 39,600 38,000 30,000 30,000 157,200 Fixed costs: Insurance Amortization Rent Property taxes Supervision 7,000 90,000 24,000 4,980 10,000 135,980 $245,980 4,620 14,400 13,000 1,200 15,900 49,120 $96,320 $11,620 104,400 37,000 6,180 25,900 185,100 $342,300 Total Factory Overhead FOH rate = budgeted FOH budgeted cost driver TRANSACTIONS: The following transactions occurred during the month of January 2021: 1. Purchases of raw materials (on account): RM Type Units Receiving report # 1012 5,000 Receiving report # 1013 6,000 Receiving report # 1014 A 2,500 Receiving report # 1015 B 5,000 Receiving report # 1016 2,125 Receiving report # 1017 B 3,000 Receiving report # 1018 Supplies N/A Assume that costs have not changed in the last year. $$ ? ? ? ? ? ? $3,333.00 1 2. Returns on account: 47 units of material B. (receiving report #1019) 3. The direct material requisitions were summarized, and the following data were shown on a material usage report. Building Department Direct Material Usage For the Month Ended January 31, 2021 Requisition M89 M90 M91 M92 M93 M94 M95 RM Type B A A B. Job Order 19-18 19-19 19-20 19-20 19-19 19-18 19-21 Quantity 1,500 3,017 800 1,000 3,000 200 1,900 B. B Finishing Department Direct Material Usage For the Month Ended January 31, 2021 Type Requisition A301 A302 A303 A304 A305 OOOOO Job Order 19-17 19-20 19-18 19-19 19-20 Quantity 5 200 800 1,500 20 4. A summary of payroll costs incurred as per the time tickets is as follows: Actual Labour Hours Worked For the Month Ended January 31, 2021 Work Ticket Job Order Building Finishing ML480 19-18 4 ML481 19-18 300 ML482 19-20 200 ML483 19-19 240 ML484 19-21 100 20 ML485 AL60 AL61 AL62 AL63 AL64 19-20 19-17 19-19 19-18 19-20 19-19 4 1,400 100 200 40 Total direct labour 864 1,744 Other payroll costs: Indirect labouc Factory Supervision Selling and admin. Wages Building Finishing $2,000 $1,500 $1,200 $1,600 Total $3,500 $2,800 $6,000 lini O Selling and admin. Wages $6,000 5. Apply overhead to jobs. See data for item 6 to obtain machine hours worked. (A direct laborer operates more than one machine simultaneously, so machine hours are not necessarily equal to labour hours incurred by Builders). 6. Use the following information to (a) record the completion and (b) the sale of the items: Betty Inc. Production and Sales Data For the Month Ended January 31, 2021 Job # Finished Units Date Finished Mach Hours Stock Number Invoice Number Sold Units Sales Revenue 19-15 19-16 221 821 Dec. 11/20 Dec. 15/20 n/a n/a X-1 X-2 #923 #924 200 800 $40,000 36,000 19-17 19-18 19-19 50 1750 1000 Jan. 5/21 Jan. 12/21 Jan. 19/21 0 3,000 2,000 X-3 X-4 X-5 #925 #926 #927 20 900 950 6,800 24,400 75,000 19-20 19-21 100 Unfinished Jan. 30/21 X-6 #928 49 8,500 150 800 5,950 *All sales are on account, $190,700" 7. Gross payroll (factory and office) of $41,235 is paid in cash. 8. The following additional overhead costs were incurred during January Item Supplies requisitioned Utilities Repairs by outsiders Miscellaneous Insurance Amortization on equip. Rent Property taxes Selling Building Finishing & Admin. $1,500 $400 $100 2,700 800 500 2,350 600 50 2,000 900 100 200 200 9,500 1,200 300 2,000 1,400 600 450 250 100 Total $2,000 4,000 3,000 3,000 1,000 11,000 4,000 800 Account to Credit ? Accrued utilities A/P 600 AIP 2 2. AMP Anet prop. Taxes $28,800 $21,100 $5,750 $1,950 9. Utility bills received $2,642 (DR Accrued utilities and CR A/P). 10. Utility bills paid, $2,499. 11. Other selling and administrative expenses incurred, $12,185. 12. Other payments on account, $62,000. 13. Collections on account, $319,005. 14. Close under-or over-applied Factory Overhead to Cost of Goods Sold. REQUIRED: You should use Excel to complete your assignment. 1. Enter all starting balances in the GL and subledgers. You will need to calculate your raw materials inventory value (about $30,000) based on your assigned variables. Adjust retained earnings to balance the opening trial balance. Round all totals to the nearest dollar and all per unit numbers to two decimal places. 2. Journalize the above summary transactions, all dated January 31, 2021. (No new balance sheet accounts are required. You should need to add only the following temporary accounts: Revenue, Cost of Goods Sold, Selling & Administrative Expense, Factory Overhead.) 3. Post to the general ledger and subledgers for January 31, 2021. (It is recommended that you post as you go, especially for accounts that have subledgers.) 4. Prepare a Pre - Closing trial balance as of January 31, 2021. (This trial balance should include all the income statement accounts). 5. Prepare schedules that reconcile the raw materials, goods in process and finished goods subledgers with the general ledger accounts as of January 31, 2021. A reconciliation template has been provided. 6. Prepare a Statement of Cost of Manufacturing for January 31, 2021. Please use the Chapter 3 version of Statement of Cost of Manufacturing suited for a Job Costing scenario. 7. Prepare an income statement and statement of retained earnings for January 31, 2021. 8. Prepare a balance sheet as of January 31, 2021. 9. Prepare and post a closing entry (or entries) for the month end. 10. Order your submission as follows: Cover sheet with group members and your variables. Journal entries General ledger Subledgers Trial balance Account reconciliations (#5 above). Complete set of Financial Statements (#6-8 above). ACCT 3022 - FALL 2021 Job Order Costing - Group Project BEGINNING POSITION: Betty Inc. is a small producer of custom backyard play structures in London, Ontario. It uses a job order costing system because each play structure is custom build for its owner and therefore receives varying attention and effort from the two departments, building and finishing. Betty Inc. uses a perpetual inventory system. Betty Inc. had the following post-closing trial balance as of December 31, 2020: Cash $30,888 Accounts Receivable 22,420 Raw Materials Inventory ? Work in Process Inventory ? Finished Goods Inventory ? Unexpired Insurance 10,321 Office Equipment 33,000 Accumulated amortization - Office Equipment $3,300 Factory Equipment 642,000 Accumulated Amortization - Factory Equipment 270,000 Accounts Payable 21,333 Wages and Salaries Payable 1,000 Accrued Utilities 2,000 Accrued Property Taxes 3,000 Capital Stock 162,000 Retained Earnings ? ? ? Detail in Subsidiary Records As of December 31, 2020 I Nork in process: Job order Dep't Number Direct Materials Direct Labour Factory Overhead Total Cost 19-17 Building $2,600.00 $1,046.00 $1,300.00 $4,946.00 Finishing $325.00 $300.00 $222.00 $847.00 $5,793,00 Finished goods: Stock # Reference Quantity Unit Cost Total Cost X-1 X-2 Job 19-15 Job 19-16 230.00 810.00 80.00 18.00 $? $? $? Raw materials: RM Type Quantity Unit Cost Total Cost B 5,005 11.250 666 ? ? ? (A) (B) (C) ? ? ? Supplies Various $2,187.00 ? 'Labour costs and overhead costs: The hourly rate including benefits for Building is $ L(D) and for finishing is $__(E). To cost jobs as they are worked on, a predetermined or budgeted overhead rate was computed for 2021 based on the following budgeted cost drivers: Building department 50,200 machine hours Finishing department $172,000 of direct labour These overhead rates will be used throughout the year by each department. All overhead will be applied to all jobs worked on during the year in proportion to the machine-hour and/or direct-labour cost devoted to each job. Betty Inc. rents its factory building. This budget was prepared after careful consideration of the sales outlook for the coming year. The forecasted budget consisted of the following items: Betty Inc. Factory Overhead Budget For The Year Ended December 31, 2021 Building Finishing Total Variable costs: Supplies Indirect Labour Utilities Repairs Misc. $14,200 22,800 30,000 24,000 19,000 110,000 $5,400 16,800 8,000 6,000 11,000 47,200 $19,600 39,600 38,000 30,000 30,000 157,200 Fixed costs: Insurance Amortization Rent Property taxes Supervision 7,000 90,000 24,000 4,980 10,000 135,980 $245,980 4,620 14,400 13,000 1,200 15,900 49,120 $96,320 $11,620 104,400 37,000 6,180 25,900 185,100 $342,300 Total Factory Overhead FOH rate = budgeted FOH budgeted cost driver TRANSACTIONS: The following transactions occurred during the month of January 2021: 1. Purchases of raw materials (on account): RM Type Units Receiving report # 1012 5,000 Receiving report # 1013 6,000 Receiving report # 1014 A 2,500 Receiving report # 1015 B 5,000 Receiving report # 1016 2,125 Receiving report # 1017 B 3,000 Receiving report # 1018 Supplies N/A Assume that costs have not changed in the last year. $$ ? ? ? ? ? ? $3,333.00 1 2. Returns on account: 47 units of material B. (receiving report #1019) 3. The direct material requisitions were summarized, and the following data were shown on a material usage report. Building Department Direct Material Usage For the Month Ended January 31, 2021 Requisition M89 M90 M91 M92 M93 M94 M95 RM Type B A A B. Job Order 19-18 19-19 19-20 19-20 19-19 19-18 19-21 Quantity 1,500 3,017 800 1,000 3,000 200 1,900 B. B Finishing Department Direct Material Usage For the Month Ended January 31, 2021 Type Requisition A301 A302 A303 A304 A305 OOOOO Job Order 19-17 19-20 19-18 19-19 19-20 Quantity 5 200 800 1,500 20 4. A summary of payroll costs incurred as per the time tickets is as follows: Actual Labour Hours Worked For the Month Ended January 31, 2021 Work Ticket Job Order Building Finishing ML480 19-18 4 ML481 19-18 300 ML482 19-20 200 ML483 19-19 240 ML484 19-21 100 20 ML485 AL60 AL61 AL62 AL63 AL64 19-20 19-17 19-19 19-18 19-20 19-19 4 1,400 100 200 40 Total direct labour 864 1,744 Other payroll costs: Indirect labouc Factory Supervision Selling and admin. Wages Building Finishing $2,000 $1,500 $1,200 $1,600 Total $3,500 $2,800 $6,000 lini O Selling and admin. Wages $6,000 5. Apply overhead to jobs. See data for item 6 to obtain machine hours worked. (A direct laborer operates more than one machine simultaneously, so machine hours are not necessarily equal to labour hours incurred by Builders). 6. Use the following information to (a) record the completion and (b) the sale of the items: Betty Inc. Production and Sales Data For the Month Ended January 31, 2021 Job # Finished Units Date Finished Mach Hours Stock Number Invoice Number Sold Units Sales Revenue 19-15 19-16 221 821 Dec. 11/20 Dec. 15/20 n/a n/a X-1 X-2 #923 #924 200 800 $40,000 36,000 19-17 19-18 19-19 50 1750 1000 Jan. 5/21 Jan. 12/21 Jan. 19/21 0 3,000 2,000 X-3 X-4 X-5 #925 #926 #927 20 900 950 6,800 24,400 75,000 19-20 19-21 100 Unfinished Jan. 30/21 X-6 #928 49 8,500 150 800 5,950 *All sales are on account, $190,700" 7. Gross payroll (factory and office) of $41,235 is paid in cash. 8. The following additional overhead costs were incurred during January Item Supplies requisitioned Utilities Repairs by outsiders Miscellaneous Insurance Amortization on equip. Rent Property taxes Selling Building Finishing & Admin. $1,500 $400 $100 2,700 800 500 2,350 600 50 2,000 900 100 200 200 9,500 1,200 300 2,000 1,400 600 450 250 100 Total $2,000 4,000 3,000 3,000 1,000 11,000 4,000 800 Account to Credit ? Accrued utilities A/P 600 AIP 2 2. AMP Anet prop. Taxes $28,800 $21,100 $5,750 $1,950 9. Utility bills received $2,642 (DR Accrued utilities and CR A/P). 10. Utility bills paid, $2,499. 11. Other selling and administrative expenses incurred, $12,185. 12. Other payments on account, $62,000. 13. Collections on account, $319,005. 14. Close under-or over-applied Factory Overhead to Cost of Goods Sold. REQUIRED: You should use Excel to complete your assignment. 1. Enter all starting balances in the GL and subledgers. You will need to calculate your raw materials inventory value (about $30,000) based on your assigned variables. Adjust retained earnings to balance the opening trial balance. Round all totals to the nearest dollar and all per unit numbers to two decimal places. 2. Journalize the above summary transactions, all dated January 31, 2021. (No new balance sheet accounts are required. You should need to add only the following temporary accounts: Revenue, Cost of Goods Sold, Selling & Administrative Expense, Factory Overhead.) 3. Post to the general ledger and subledgers for January 31, 2021. (It is recommended that you post as you go, especially for accounts that have subledgers.) 4. Prepare a Pre - Closing trial balance as of January 31, 2021. (This trial balance should include all the income statement accounts). 5. Prepare schedules that reconcile the raw materials, goods in process and finished goods subledgers with the general ledger accounts as of January 31, 2021. A reconciliation template has been provided. 6. Prepare a Statement of Cost of Manufacturing for January 31, 2021. Please use the Chapter 3 version of Statement of Cost of Manufacturing suited for a Job Costing scenario. 7. Prepare an income statement and statement of retained earnings for January 31, 2021. 8. Prepare a balance sheet as of January 31, 2021. 9. Prepare and post a closing entry (or entries) for the month end. 10. Order your submission as follows: Cover sheet with group members and your variables. Journal entries General ledger Subledgers Trial balance Account reconciliations (#5 above). Complete set of Financial Statements (#6-8 above)