chapter 3 problem 57p

with the journal entry can i have a good solution because in the web site with in the debit and credit is confuse me.

thank you

i could not uplode the question

http://www.pdf.investintech.com/preview/a2927b96-3306-11e7-922a-002590d31986/index.html

Assignment Brief

C441

Comprehensive job costing problem: manufacturer

Brass Design Ltd manufactures brass musical instruments for use by high school students. The company

uses a job costing system, in which manufacturing overhead is applied on the basis of direct labour

hours. The company's budget for the current year included the following predictions:

Budgeted total manufacturing overhead

$426 300

Budgeted total direct labour hours

20 300

During March, the firm began two production jobs:

Job number T8i, consisting of 76 trombones.

Job number C40, consisting of 110 cornets.

The events of March are described as follows:

1000 square metres of rolled brass sheet metal were purchased for $5000 on credit.

400 kilograms of brass tubing were purchased on credit for $4000.

The following requisitions were filed on 5 March:

Requisition number 112: 250 square metres of brass sheet metal @ $5.00 per square metre (for job

number T8i)

Requisition number 113: 1000 kilograms of brass tubing @ $10 per kilogram (for job number C40)

Requisition number 114:10 litres of valve lubricant @ $10 per litre

All brass used in production is treated as direct material. Valve lubricant is an indirect material.

An analysis of labour time sheets revealed the following labour usage for March:

Direct labour: job number T8i, 800 hours @ $20 per hour

Direct labour: job number C.40, 900 hours @ $20 per.hour

Indirect labour: general factory clean-up, $4000

Indirect labour: factory supervisory salaries, $9000

Depreciation of the factory building and equipment during March amounted to $12 000.

Rent paid in cash for warehouse space used during March was $1200.

Electricity costs incurred during March amounted to $2100. The invoices for these costs were

received, but the bills were not paid in March.

March council rates and property taxes on the factory were paid in cash, $2400.

Insurance cost covering factory operations for the month of March was $3100. The insurance

policy had been prepaid in February.

Costs of salaries and on-costs for sales and administrative personnel paid in cash during March

amounted to $8000.

Depreciation on administrative office equipment and space amounted to $4000.

Other selling and administrative expenses paid in cash during March amounted to Moo.

Job number T81 was completed on 20 March.

Half the trombones in job number T81 were sold on credit during March for $700 each.

The 1 March balances in selected accounts are as follows:

Cash

$10 000

Accounts receivable

21 000

Prepaid insurance

5 000

continued >

continued

Raw material inventory

149 000

Manufacturing supplies inventory

500

Work in process inventory

91 000

Finished goods inventory

220 000

Accumulated depreciation: buildings and equipment

102 000

Accounts payable

13 000

Wages payable

8 000

Required:

1

Calculate the company's predetermined overhead rate for the current year.

2

Complete the following job cost sheet for job number T81.

3

Prepare journal entries to record the events of March.

4

Set up ledger accounts, and post the journal entries made in requirement 3.

5

Calculate the overapplied or underapplied overhead for March. Prepare a journal entry to close this

balance into cost of goods sold.

6 Prepare a schedule of cost of goods manufactured for March.

7

Prepare a schedule of cost of goods sold for March.

8

Prepare an income statement for March.

JOB COST SHEET

Job number:

181

Description:

Date started:

Date completed:

Number of units completed:

Direct Material

Date

Requisition number

Quantity

Unit price

Cost

Direct Labour

Dates

Time sheet numbers

Hours

Rate

Cost

8/3 to 12/3

308 to 312

Manufacturing Overhead

Dates

Cost driver

Quantity

Application rate

Cost

8/3 to 12/3

Cost Summary

Cost item

Amount

Total direct material

Total direct labour

Total manufacturing overhead

Total cost

Unit cost

Delivery Summary

Date

Units shipped

Units remaining in inventory

Cost balance

C5.43

Weighted average process costing: manufacturer

Leather Products Ltd manufactures leather goods. The company's profits have declined during the past

nine months. In an attempt to isolate the causes of poor profit performance, management is investigating

the manufacturing operations of each of its products.

One of the company's main products is leather belts. The belts are produced in a single, continuous

process in the Elizabeth plant. During the process, leather strips are sewn, punched and dyed. The belts

then enter a final finishing stage to conclude the process. Labour and overhead are applied continually

during the manufacturing process. All materials are introduced at the beginning of the process. The firm

uses the weighted average method to calculate its unit costs.

The leather belts produced at the Elizabeth plant are sold wholesale for $22.95 each. Management

want to compare the current manufacturing costs per unit with the market prices for leather belts. Top

management has asked the Elizabeth plant accountant to submit data on the cost of manufacturing the

leather belts for the month of October. These cost data will be used to determine whether modifications

in the production process should be initiated or whether an increase in the selling price of the belts is

justified. The cost per belt used for planning and control is $u.50.

The work in process inventory consisted of 500 partially completed units on 1 October. The belts were

30 per cent complete as to conversion. The costs included in the inventory on 1 October were as follows:

Leather strips

$1650

Buckles

350

Conversion costs

2500

Total

$4500

During October, 8000 leather strips were placed into production. A total of 8100 leather belts were

completed. The work in process inventory on 31 October consisted of 400 belts that were 40 per cent

complete as to conversion.

The costs charged to production during October were as follows:

Leather strips

$41 000

Buckles

8 000

Conversion costs

55 320

Total

$104 320

Required:

1

In order to provide cost data on the manufacture of leather belts in the Elizabeth Plant to the top

management of Leather Products Ltd, calculate the following amounts for the month of October:

(a) Equivalent units for material and conversion.

(b) Cost per equivalent unit for material and conversion.

(c) Assignment of production costs to the 31 October work in process inventory and to goods

transferred out.

(d) Weighted average unit cost of the leather belts completed and transferred to finished goods.

2

Comment on the cost per belt of $11.50 which the company has used for planning and control.