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Glass Company makes glass orders based on the customer specifications, so the company uses job costing to track costs. The company uses direct labor hours
Glass Company makes glass orders based on the customer specifications, so the company uses job costing to track costs. The company uses direct labor hours as the cost driver for manufacturing overhead application. The company estimated the following manufacturing overhead costs for the year: $340,000 The company estimated the following usage of direct-labor hours for the year: 170,000 2. Beginning Work-in-process, March 1 (Job 55) $21,000 3. Beginning Finished Goods, March 1 (Job 57) $88,000 2. Labor Information for March: Direct-labor hours: Job 55 5,000 Job 58 6,400 Job 59 2,600 Labor costs in factory: Direct-labor wages $280,000 Indirect-labor wages $20,000 3. Material Information for March: Raw Materials, Inventory, March 1 $8,000 Purchase or raw material $159,000 Direct materials requisitioned: Job 55 $55,000 Job 58 $72,000 Job 59 $18,000 4. Other costs incurred in March: Factory Utilities $1,800 Sales offices Utilities $1,100 Administrative offices Utilities $1,900 Factory equipment repair and maintenance costs $1,700 Depreciation on factory equipment $3,000 Manufacturing supplies purchased and used $2,000 5. During March the following jobs were completed : Job 55 Job 58 6. During March the following jobs were sold for the following amounts: Job 55 $215,000 Job 57 $100,000 Required: You need to use cell references to provide answers and calculations. There are 9 questions in Part 1. 1. Develop the predetermined overhead rate. 2. Complete the job cost sheets provided below for the month of March: Job 55 Job 58 Job 59 Beginning Balance Current costs: Direct materials Direct Labor Hint: You need to calculate the hourly rate and then compute direct labor cost per job. Applied overhead Total 3. Determine the ending Work-In-Process Inventory at the end of March and provide the Job number of the job(s) still in Work-in-Process at the end of March and the determine total cost of ending work in process for March. 4. Determine the ending Finished Goods for March and provide the Job number(s) of the job(s) in Finished Goods at the end of March and determine the total cost of ending finished goods for March. 5. Determine the Cost of Goods Sold for March and provide the Job number of the Job(s) in Cost of Goods Sold for March and determine the total cost of goods sold for March. 6. Prepare a statement of cost of goods manufactured for March below. Use Manufacturing Overhead applied in your statement. You need to prepare in good form. Please see Exhibit 18.6. Glass Company Statement of Cost of Goods Manufactured For Month ending March 31, 20XX Current manufacturing costs: Cost of material placed in production Raw materials, 3/1/XX Purchases Total available Raw materials, 3/31/XX Direct Labor Manufacturing overhead Applied Work-in-process March 1, 20XX Total costs in process Work-in-process March 31, 20XX Cost of goods manufactured 7. Prepare an Income Statement for March below. The company does not close the over or underapplied overhead until the end of the year, so no adjustment is needed to Cost of Goods Sold. You need to prepare in good form. Please see Exhibit 18.6, but you do not have to provide a detailed COGS section, since you know COGS relates to the Job(s) sold at cost and should agree with your analysis in #5 above. Glass Company Income Statement For Month ending March 31, 20XX Sales Cost of goods sold Gross Profit Selling and Administrative expenses Net income 8. Determine the dollar amount and the underapplied or overapplied manufacturing for March. Provide your calculations. 9. Prepare a Pie chart below showing the three product costs that were added to the job cost sheets in March.
Glass Company makes glass orders based on the customer specifications, so the company uses job costing to track costs. | |||||||||||||||||
The company uses direct labor hours as the cost driver for manufacturing overhead application. | |||||||||||||||||
The company estimated the following manufacturing overhead costs for the year: | $340,000 | ||||||||||||||||
The company estimated the following usage of direct-labor hours for the year: | 170,000 | ||||||||||||||||
2. Beginning Work-in-process, March 1 (Job 55) | $21,000 | ||||||||||||||||
3. Beginning Finished Goods, March 1 (Job 57) | $88,000 | ||||||||||||||||
2. Labor Information for March: | |||||||||||||||||
Direct-labor hours: | |||||||||||||||||
Job 55 | 5,000 | ||||||||||||||||
Job 58 | 6,400 | ||||||||||||||||
Job 59 | 2,600 | ||||||||||||||||
Labor costs in factory: | |||||||||||||||||
Direct-labor wages | $280,000 | ||||||||||||||||
Indirect-labor wages | $20,000 | ||||||||||||||||
3. Material Information for March: | |||||||||||||||||
Raw Materials, Inventory, March 1 | $8,000 | ||||||||||||||||
Purchase or raw material | $159,000 | ||||||||||||||||
Direct materials requisitioned: | |||||||||||||||||
Job 55 | $55,000 | ||||||||||||||||
Job 58 | $72,000 | ||||||||||||||||
Job 59 | $18,000 | ||||||||||||||||
4. Other costs incurred in March: | |||||||||||||||||
Factory Utilities | $1,800 | ||||||||||||||||
Sales offices Utilities | $1,100 | ||||||||||||||||
Administrative offices Utilities | $1,900 | ||||||||||||||||
Factory equipment repair and maintenance costs | $1,700 | ||||||||||||||||
Depreciation on factory equipment | $3,000 | ||||||||||||||||
Manufacturing supplies purchased and used | $2,000 | ||||||||||||||||
5. During March the following jobs were completed : | |||||||||||||||||
Job 55 | |||||||||||||||||
Job 58 | |||||||||||||||||
6. During March the following jobs were sold for the following amounts: | |||||||||||||||||
Job 55 | $215,000 | ||||||||||||||||
Job 57 | $100,000 | ||||||||||||||||
Required: | You need to use cell references to provide answers and calculations. There are 9 questions in Part 1. | ||||||||||||||||
1. Develop the predetermined overhead rate. | |||||||||||||||||
2. Complete the job cost sheets provided below for the month of March: | |||||||||||||||||
Job 55 | Job 58 | Job 59 | |||||||||||||||
Beginning Balance | |||||||||||||||||
Current costs: | |||||||||||||||||
Direct materials | |||||||||||||||||
Direct Labor | Hint: You need to calculate the hourly rate and then compute direct labor cost per job. | ||||||||||||||||
Applied overhead | |||||||||||||||||
Total | |||||||||||||||||
3. Determine the ending Work-In-Process Inventory at the end of March and provide the Job number of the job(s) still in Work-in-Process at the end of March and the determine total cost of ending work in process for March. | |||||||||||||||||
4. Determine the ending Finished Goods for March and provide the Job number(s) of the job(s) in Finished Goods at the end of March and determine the total cost of ending finished goods for March. | |||||||||||||||||
5. Determine the Cost of Goods Sold for March and provide the Job number of the Job(s) in Cost of Goods Sold for March and determine the total cost of goods sold for March. | |||||||||||||||||
6. Prepare a statement of cost of goods manufactured for March below. Use Manufacturing Overhead applied in your statement. You need to prepare in good form. Please see Exhibit 18.6. | |||||||||||||||||
Glass Company | |||||||||||||||||
Statement of Cost of Goods Manufactured | |||||||||||||||||
For Month ending March 31, 20XX | |||||||||||||||||
Current manufacturing costs: | |||||||||||||||||
Cost of material placed in production | |||||||||||||||||
Raw materials, 3/1/XX | |||||||||||||||||
Purchases | |||||||||||||||||
Total available | |||||||||||||||||
Raw materials, 3/31/XX | |||||||||||||||||
Direct Labor | |||||||||||||||||
Manufacturing overhead Applied | |||||||||||||||||
Work-in-process March 1, 20XX | |||||||||||||||||
Total costs in process | |||||||||||||||||
Work-in-process March 31, 20XX | |||||||||||||||||
Cost of goods manufactured | |||||||||||||||||
7. Prepare an Income Statement for March below. The company does not close the over or underapplied overhead until the end of the year, so no adjustment is needed to Cost of Goods Sold. | |||||||||||||||||
You need to prepare in good form. Please see Exhibit 18.6, but you do not have to provide a detailed COGS section, since you know COGS relates to the Job(s) sold at cost and should agree with your analysis in #5 above. | |||||||||||||||||
Glass Company | |||||||||||||||||
Income Statement | |||||||||||||||||
For Month ending March 31, 20XX | |||||||||||||||||
Sales | |||||||||||||||||
Cost of goods sold | |||||||||||||||||
Gross Profit | |||||||||||||||||
Selling and Administrative expenses | |||||||||||||||||
Net income | |||||||||||||||||
8. Determine the dollar amount and the underapplied or overapplied manufacturing for March. Provide your calculations. | |||||||||||||||||
9. Prepare a Pie chart below showing the three product costs that were added to the job cost sheets in March. | |||||||||||||||||
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