Maria is the sole stockholder of Purl of Great Price Comp. which produced high end knitted sweater vests to retail outlets. The comp started in January of the current year and employs three knitters, each of whom work 40 hours a week, and one office manager/knitting supervisor. (This employee works 20 hours a week as office manager, 20 hours per week as knitting supervisor). All wages are paid in cash at the end of each month.

Each knitter has a knitting machine that is used about of the knitters time, the rest of the time they hand knit. The comp also has a packaging machine to wrap garments in plastic for shipping, which is operated by the office manager/knitting supervisor about five hours per week.

The knitting machines were purchased on January 1st of the current year and cost $2400 each, with an artificial useful life of 10 years and no salvage value. The packaging machine was purchased on the same date and cost $4800, with the same anticipated useful life and salvage value.

Job Costs Sheets

On December 10, POGP company received an order for 200 sweater vests and assigned job 83 to the order. Review the Materials Requisition table to add the materials to the Job Cost Sheet for Job 83

On December 15, review the Time Ticket tables to add the appropriate amount of direct labor and factory overhead costs to the Job Sheet for Job 62 for the period December 1 through December 15.

On December 31, the last work day of the year for the knitters, review Time Ticket tables to add the appropriate amount of direct labor and factory overhead costs to the Job Sheet for Job 83 for the period December 16 through December 31.

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers Letter On Company Off Company a. $ 69,870 351,610 b. 619,040 337,460 C. A 643,410 268,880 X d. $ 636,920 $ 115,390 e. $ 560,560 $ 384,280 f. $ 404,580 $ 142,610 Predetermined Factory Overhead Rate Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH). Estimated Selected Amounts for the Year Estimated depreciation on equipment $1,200 Estimated total Office Manager/Knitting Supervisor wages $36,000 Estimated office utilities $4,000 Estimated factory utilities $4,800 Estimated factory rent $24,000 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 Compute the predetermined factory overhead rate for the current year. $9.60 per DLH Date: Dec. 10 Materials Requisition Reg. No. 12255 Job No. 83 Description Qty. Issued Unit Price Yarn type B 700 skeins $5 Total issued Amount $3,500 $3,500 Name: Susan Blake Time Ticket No. 1255 Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 62 65 $1,300 12/01-12/15 12/16-12/31 $20 20 83 103 2,060 Total Cost $3,360 Name: Josh Porter Time Ticket No. 2274 Work Description: Knitting/piecing Dates Job No. 12/01-12/15 12/16-12/31 83 62 Hours Worked Unit Price Amount 75 $20 $1,500 20 1,760 88 Total Cost $3,260 Name: Mary Jones Time Ticket No. 3923 Work Description: Knitting/piecing Dates Job No. 12/01-12/15 62 12/16-12/31 83 Hours Worked Unit Price Amount 60 $20 $1,200 109 20 2,180 Total Cost $3,380 Job 62 Sweaters 100 units: Direct Materials Direct Labor Factory Overhead Total $5,000 $300 $104 $5,404 Balance Dec. 1 Dec. 15 0 3,000 X 3,040 X 6,040 X Total Cost 5,000 $ $ 0 x $ 11,444 x Unit Cost $ 114.44 x Job 83 200 units: Sweater vests Direct Materials Direct Labor $0 $0 3,500 o Factory Overhead $0 Total Job Cost $0 Balance Dec. 1 Dec. 10 o 3,500 Dec. 31 o 4,500 x 4,560 X 9,060 X Total Cost 3,500 $ 0 x $ 12,560 x Journal On December 10, POGP Company receives an order for 200 sweater vests and assigns Job 83 to the order. Review the Materials Requisition table to journalize the entry to record the addition of the materials to Work in Process. If an amount box does not require an entry, leave it blank. Dec. 10 Work in Process 3,500 Materials 0 3,500 Feedback Check My Work Think about the flow of costs incurred to do a job and the accounts affected by sales to customers. On December 15, review the Time Ticket tables to journalize the entry to record the addition of direct labor to Work in Process for the period December 1 through December 15. If an amount box does not require an entry, leave it blank. Dec. 15 Work in Process 3,000 X 0 Wages Payable 0 3,000 Feedback Check My Work Partially correct On December 15, review the Time Ticket tables to journalize the entry to record the addition of factory overhead to Work in Process for the period December 1 through December 15. If an amount box does not require an entry, leave it blank. Dec. 15 Work in Process 3,040 X Factory Overhead o 3,040 On December 21, Job 62 is completed. Review the Job Cost Sheets and your journal entries. Journalize the entry to move the associated costs to the finished goods account. If an amount box does not require an entry, leave it blank. Dec. 21 Finished Goods 11,444 X 0 Work in Process o 11,444 x Feedback Check My Work On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each. Journalize the following transactions: a. The entry to record the sale. b. The entry to record the transfer of costs from Finished Goods to Cost of Goods Sold. If an amount box does not require an entry, leave it blank. Dec. 22 Accounts Receivable 9,375 0 Sales 0 9,375 Dec. 22 Cost of Goods Sold 8,583 0 Finished Goods 0 8,583 X Feedback On December 31, the last work day of the year for the knitters, review the Time Ticket tables to journalize the entry to record the addition of direct labor to Work in Process for the period December 16 through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process 0 X 0 Wages Payable 0 0 On December 31, the last work day of the year for the knitters, review the Time Ticket tables to journalize the entry to record the addition of factory overhead to Work in Process for the period December 16 through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process 4,500 x 0 Factory Overhead 4,500 X Feedback Check My Work On December 31, journalize the following transactions. Note that expenses (b), (c), and (d) were paid in cash. a. One month's depreciation on equipment b. One month's payroll for all employees c. One month's rent of $2,000 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank. Dec. 31 Factory Overhead 1,750 X 0 Wages Expense 1,750 X Wages Payable 7,500 X 0 Cash 0 11,000 X Accumulated Depreciation Equipment o 1,200 x On December 31, prepare the journal entry to dispose of the balance in the factory overhead account. If an amount box does not require an entry, leave it blank. Dec. 31 Cost of Goods Sold 2,600 x o Factory Overhead 0 2,600 X Feedback Check My Work Final Question What are the balances in the following accounts as of December 31? If an amount is zero, enter "0". Materials 1,500 Work in Process $ 12,560 X Finished Goods $ 2,861 x Factory Overhead $ 0 Cost of Goods Sold $ 261,023 X 1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers Letter On Company Off Company a. $ 69,870 351,610 b. 619,040 337,460 C. A 643,410 268,880 X d. $ 636,920 $ 115,390 e. $ 560,560 $ 384,280 f. $ 404,580 $ 142,610 Predetermined Factory Overhead Rate Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH). Estimated Selected Amounts for the Year Estimated depreciation on equipment $1,200 Estimated total Office Manager/Knitting Supervisor wages $36,000 Estimated office utilities $4,000 Estimated factory utilities $4,800 Estimated factory rent $24,000 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 Compute the predetermined factory overhead rate for the current year. $9.60 per DLH Date: Dec. 10 Materials Requisition Reg. No. 12255 Job No. 83 Description Qty. Issued Unit Price Yarn type B 700 skeins $5 Total issued Amount $3,500 $3,500 Name: Susan Blake Time Ticket No. 1255 Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 62 65 $1,300 12/01-12/15 12/16-12/31 $20 20 83 103 2,060 Total Cost $3,360 Name: Josh Porter Time Ticket No. 2274 Work Description: Knitting/piecing Dates Job No. 12/01-12/15 12/16-12/31 83 62 Hours Worked Unit Price Amount 75 $20 $1,500 20 1,760 88 Total Cost $3,260 Name: Mary Jones Time Ticket No. 3923 Work Description: Knitting/piecing Dates Job No. 12/01-12/15 62 12/16-12/31 83 Hours Worked Unit Price Amount 60 $20 $1,200 109 20 2,180 Total Cost $3,380 Job 62 Sweaters 100 units: Direct Materials Direct Labor Factory Overhead Total $5,000 $300 $104 $5,404 Balance Dec. 1 Dec. 15 0 3,000 X 3,040 X 6,040 X Total Cost 5,000 $ $ 0 x $ 11,444 x Unit Cost $ 114.44 x Job 83 200 units: Sweater vests Direct Materials Direct Labor $0 $0 3,500 o Factory Overhead $0 Total Job Cost $0 Balance Dec. 1 Dec. 10 o 3,500 Dec. 31 o 4,500 x 4,560 X 9,060 X Total Cost 3,500 $ 0 x $ 12,560 x Journal On December 10, POGP Company receives an order for 200 sweater vests and assigns Job 83 to the order. Review the Materials Requisition table to journalize the entry to record the addition of the materials to Work in Process. If an amount box does not require an entry, leave it blank. Dec. 10 Work in Process 3,500 Materials 0 3,500 Feedback Check My Work Think about the flow of costs incurred to do a job and the accounts affected by sales to customers. On December 15, review the Time Ticket tables to journalize the entry to record the addition of direct labor to Work in Process for the period December 1 through December 15. If an amount box does not require an entry, leave it blank. Dec. 15 Work in Process 3,000 X 0 Wages Payable 0 3,000 Feedback Check My Work Partially correct On December 15, review the Time Ticket tables to journalize the entry to record the addition of factory overhead to Work in Process for the period December 1 through December 15. If an amount box does not require an entry, leave it blank. Dec. 15 Work in Process 3,040 X Factory Overhead o 3,040 On December 21, Job 62 is completed. Review the Job Cost Sheets and your journal entries. Journalize the entry to move the associated costs to the finished goods account. If an amount box does not require an entry, leave it blank. Dec. 21 Finished Goods 11,444 X 0 Work in Process o 11,444 x Feedback Check My Work On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each. Journalize the following transactions: a. The entry to record the sale. b. The entry to record the transfer of costs from Finished Goods to Cost of Goods Sold. If an amount box does not require an entry, leave it blank. Dec. 22 Accounts Receivable 9,375 0 Sales 0 9,375 Dec. 22 Cost of Goods Sold 8,583 0 Finished Goods 0 8,583 X Feedback On December 31, the last work day of the year for the knitters, review the Time Ticket tables to journalize the entry to record the addition of direct labor to Work in Process for the period December 16 through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process 0 X 0 Wages Payable 0 0 On December 31, the last work day of the year for the knitters, review the Time Ticket tables to journalize the entry to record the addition of factory overhead to Work in Process for the period December 16 through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process 4,500 x 0 Factory Overhead 4,500 X Feedback Check My Work On December 31, journalize the following transactions. Note that expenses (b), (c), and (d) were paid in cash. a. One month's depreciation on equipment b. One month's payroll for all employees c. One month's rent of $2,000 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank. Dec. 31 Factory Overhead 1,750 X 0 Wages Expense 1,750 X Wages Payable 7,500 X 0 Cash 0 11,000 X Accumulated Depreciation Equipment o 1,200 x On December 31, prepare the journal entry to dispose of the balance in the factory overhead account. If an amount box does not require an entry, leave it blank. Dec. 31 Cost of Goods Sold 2,600 x o Factory Overhead 0 2,600 X Feedback Check My Work Final Question What are the balances in the following accounts as of December 31? If an amount is zero, enter "0". Materials 1,500 Work in Process $ 12,560 X Finished Goods $ 2,861 x Factory Overhead $ 0 Cost of Goods Sold $ 261,023 X