Exercise 4-14 (Part Level Submission) Drew Corp. designs and manufactures mascot uniforms for high school, college, and professional sports teams. Since each teams uniform is unique in color and design, Drew uses a job order costing system. On January 1, the T-accounts for some of Drews primary balance sheet accounts were as follows: | Raw Materials Inventory | | Work in Process Inventory | | Beg. | | 12,500 | | | | | | Beg. | | 31,000 | | | | | | | | | | | | | | | | | | | | | Finished Goods Inventory | | Cash | | Beg. | | 29,500 | | | | | | Beg. | | 40,700 | | | | | | | | | | | | | | | | | | | | | Accounts Receivable | | Accounts Payable | | Beg. | | 61,000 | | | | | | | | | | Beg. | | 42,000 | | | | | | | | | | | | | | | | During the year, the following events occurred: | 1. | Drew purchased raw materials costing $89,200 on account. | | 2. | Drew used $93,000 of raw materials in production. Of these, 70% were classified as direct materials and 30% as indirect materials. (Drew maintains a single Raw Materials Inventory account.) | | 3. | Drew used 31,100 hours of direct labor. The companys average direct labor rate was $7.50 per hour (credit Wages Payable). | | 4. | The companys only indirect labor cost was the salary of a security guard hired to watch the companys shop after hours. The guards annual salary was $29,000 (credit Wages Payable). | | 5. | Other manufacturing overhead costs the company incurred on account totaled $70,000. | | 6. | Drew applied $135,000 in manufacturing overhead. | | 7. | The company completed production of goods costing $329,000. | | 8. | The companys Cost of Goods Sold balance was $303,750 before adjusting for over- or underapplied overhead. (Do not adjust for over underapplied overhead.) | | 9. | Sales revenue was $461,000 (all sales were made on account). | | 10. | Drew collected $490,000 from customers. | | 11. | The company paid accounts payable of $100,000. | | 12. | At year-end, all wages earned during the year had been paid. | |
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