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 $30,888 22,420 ? ? ? 10,321 33,000 $3,300 Cash Accounts Receivable Raw Materials Inventory Work in Process Inventory Finished Goods Inventory Unexpired Insurance Office Equipment Accumulated amortization - Office Equipment Factory Equipment Accumulated Amortization - Factory Equipment Accounts Payable Wages and Salaries Payable Accrued Utilities Accrued Property Taxes Capital Stock Retained Earnings 642,000 270,000 21,333 1,000 2,000 3,000 162,000 ? ? ? Variables CHECK FIGURES COGM with Adjustment Net Income ABCDE 2.45 1.358.00 11.50 12.10 $ 102, 158.05 $ 64,866.34 Detail in Subsidiary Records As of December 31, 2020 Work in process: Job order Number Dept 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 Job 19-15 230.00 80.00 $ ? X-2 Job 19-16 810.00 18.00 $? $? Raw materials: RM Type Total Cost Quantity Unit Cost B 5,005 11,250 666 ? ? ? (A) (B) (C) ? ? ? Supplies Various $2,187.00 ? The following transactions occurred during the month of January 2021: 1. Purchases of raw materials (on account): RM Type Units SS Receiving report # 1012 A 5,000 12250 Receiving report # 1013 B 6,000 8100 Receiving report # 1014 A 2,500 6125 Receiving report # 1015 B 5,000 6750 Receiving report # 1016 2,125 17000 Receiving report # 1017 B 3,000 4050 Receiving report # 1018 Supplies N/A $3,333.00 Assume that costs have not changed in the last year. 0 0 0 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 RM Type Job Order Quantity M89 B 19-18 1,500 M90 A 19-19 3,017 M91 A 19-20 800 M92 19-20 1,000 M93 B 19-19 3,000 M94 B 19-18 200 M95 19-21 1,900 00 CD 00 00 Labour costs and overhead costs: The hourly rate including benefits for Building is $_11.50_(D) and for finishing is $ 12.10 (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 Total Factory Overhead 7,000 4,620 $11,620 90,000 14,400 104,400 24,000 13,000 37,000 4,980 1,200 6,180 10,000 15,900 25,900 135,980 49,120 185,100 $245,980 $96,320 $342,300 FOH rate = budgeted FOH budgeted cost driver TRANSACTIONS: Finishing Department Direct Material Usage For the Month Ended January 31, 2021 Requisition Type Job Order Quantity A301 19-17 5 A302 19-20 200 A303 19-18 800 A304 C 19-19 1,500 A305 19-20 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 Job Ticket Order Building Finishing ML480 19-18 4 ML481 19-18 300 ML 482 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 labour Factory Supervision Selling and admin. Wages Building Finishing Total $2,000 $1,500 $3,500 $1,200 $1,600 $2,800 $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 labout 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 Date Mach Stock Invoice Sold Sales # Units Finished Hours Number Number Units Revenue 19-15 221 Dec. 11/20 n/a X-1 #923 200 $40,000 19-16 821 Dec. 15/20 n/a X-2 #924 800 36,000 19-17 50 Jan. 5/21 0 X-3 #925 20 6,800 19-18 1750 Jan. 12/21 3,000 X-4 #926 900 24,400 19-19 1000 Jan. 19/21 2,000 X-5 #927 950 75,000 19-20 100 Jan. 30/21 19-21 Unfinished X-6 #928 150 800 X-6 49 8,500 5,950 $190.700* *All sales are on account. 7. Gross payroll (factory and office) of $41,235 is paid in cash. 8. The following additional overhead costs were incurred during January Selling & Account to Item Total Building Finishing Admin. Credit Supplies requisitioned $2,000 $1,500 $400 $100 ? Utilities 4,000 2,700 800 500 Accrued utilities Repairs by outsiders 3,000 2,350 600 50 A/P Miscellaneous 3,000 2,000 900 100 A/P Insurance 1,000 600 200 200 ? Amortization on equip. 11,000 9,500 1,200 300 ? 4,000 2,000 1,400 600 A/P Property taxes 800 450 250 100 Accr prop. Taxes Rent $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, $119,005. 14. Close under- or over-applied Factory Overhead to Cost of Goods Sold. 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 $30,888 22,420 ? ? ? 10,321 33,000 $3,300 Cash Accounts Receivable Raw Materials Inventory Work in Process Inventory Finished Goods Inventory Unexpired Insurance Office Equipment Accumulated amortization - Office Equipment Factory Equipment Accumulated Amortization - Factory Equipment Accounts Payable Wages and Salaries Payable Accrued Utilities Accrued Property Taxes Capital Stock Retained Earnings 642,000 270,000 21,333 1,000 2,000 3,000 162,000 ? ? ? Variables CHECK FIGURES COGM with Adjustment Net Income ABCDE 2.45 1.358.00 11.50 12.10 $ 102, 158.05 $ 64,866.34 Detail in Subsidiary Records As of December 31, 2020 Work in process: Job order Number Dept 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 Job 19-15 230.00 80.00 $ ? X-2 Job 19-16 810.00 18.00 $? $? Raw materials: RM Type Total Cost Quantity Unit Cost B 5,005 11,250 666 ? ? ? (A) (B) (C) ? ? ? Supplies Various $2,187.00 ? The following transactions occurred during the month of January 2021: 1. Purchases of raw materials (on account): RM Type Units SS Receiving report # 1012 A 5,000 12250 Receiving report # 1013 B 6,000 8100 Receiving report # 1014 A 2,500 6125 Receiving report # 1015 B 5,000 6750 Receiving report # 1016 2,125 17000 Receiving report # 1017 B 3,000 4050 Receiving report # 1018 Supplies N/A $3,333.00 Assume that costs have not changed in the last year. 0 0 0 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 RM Type Job Order Quantity M89 B 19-18 1,500 M90 A 19-19 3,017 M91 A 19-20 800 M92 19-20 1,000 M93 B 19-19 3,000 M94 B 19-18 200 M95 19-21 1,900 00 CD 00 00 Labour costs and overhead costs: The hourly rate including benefits for Building is $_11.50_(D) and for finishing is $ 12.10 (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 Total Factory Overhead 7,000 4,620 $11,620 90,000 14,400 104,400 24,000 13,000 37,000 4,980 1,200 6,180 10,000 15,900 25,900 135,980 49,120 185,100 $245,980 $96,320 $342,300 FOH rate = budgeted FOH budgeted cost driver TRANSACTIONS: Finishing Department Direct Material Usage For the Month Ended January 31, 2021 Requisition Type Job Order Quantity A301 19-17 5 A302 19-20 200 A303 19-18 800 A304 C 19-19 1,500 A305 19-20 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 Job Ticket Order Building Finishing ML480 19-18 4 ML481 19-18 300 ML 482 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 labour Factory Supervision Selling and admin. Wages Building Finishing Total $2,000 $1,500 $3,500 $1,200 $1,600 $2,800 $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 labout 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 Date Mach Stock Invoice Sold Sales # Units Finished Hours Number Number Units Revenue 19-15 221 Dec. 11/20 n/a X-1 #923 200 $40,000 19-16 821 Dec. 15/20 n/a X-2 #924 800 36,000 19-17 50 Jan. 5/21 0 X-3 #925 20 6,800 19-18 1750 Jan. 12/21 3,000 X-4 #926 900 24,400 19-19 1000 Jan. 19/21 2,000 X-5 #927 950 75,000 19-20 100 Jan. 30/21 19-21 Unfinished X-6 #928 150 800 X-6 49 8,500 5,950 $190.700* *All sales are on account. 7. Gross payroll (factory and office) of $41,235 is paid in cash. 8. The following additional overhead costs were incurred during January Selling & Account to Item Total Building Finishing Admin. Credit Supplies requisitioned $2,000 $1,500 $400 $100 ? Utilities 4,000 2,700 800 500 Accrued utilities Repairs by outsiders 3,000 2,350 600 50 A/P Miscellaneous 3,000 2,000 900 100 A/P Insurance 1,000 600 200 200 ? Amortization on equip. 11,000 9,500 1,200 300 ? 4,000 2,000 1,400 600 A/P Property taxes 800 450 250 100 Accr prop. Taxes Rent $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, $119,005. 14. Close under- or over-applied Factory Overhead to Cost of Goods Sold