Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces high-end knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters (each of whom work 40 hours per week) and one office manager/knitting supervisor (this employee works 20 hours per week as office manager, and 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 2/3 of the knitters time, the rest of the knitters time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the office manager/knitting supervisor approximately 5 hours per week. The knitting machines were purchased on January 1 of the current year, and cost $2,400 each, with an anticipated useful life of 10 years and no salvage value. The packaging machine was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value.

Required:

1.

Review the data in the Predetermined Factory Overhead Ratepanel, and calculate the predetermined factory overhead rate for POGP Company.

2.

On December 10, POGP Company receives an order for 200 sweater vests and assigns Job 83 to the order. Review the Materials Requisitionpanel.

A.	Journalize the entry to record the addition of the materials to Work in Process.*
B.	On the Job Cost Sheetspanel, add the materials to the Job Cost Sheet for Job 83.

3.

On December 15, review the source documents on the Time Ticketspanel.

A.	Journalize the entry to record the addition of direct labor to Work in Process for the period December 1 through December 15.*
B.	Journalize the entry to record the addition of factory overhead to Work in Process for the period December 1 through December 15.*
C.	On the Job Cost Sheets panel, add the appropriate amount of direct labor and factory overhead costs to the Job Cost Sheet for Job 62 for the period December 1 through December 15.

4.

On December 21, Job 62 is completed. Review the Job Cost Sheets panel and your journal entries. Journalize the entry to move the associated costs to the Finished Goods account.*

5.

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.

6.

On December 31, the last work day of the year for the knitters, review the source documents on the Time Tickets panel.

A.	Journalize the entry to record the addition of direct labor to Work in Process for the period December 16 through December 31.*
B.	Journalize the entry to record the addition of factory overhead to Work in Process for the period December 16 through December 31.*
C.	On the Job Cost Sheets panel, add the appropriate amount of direct labor and factory overhead costs to the Job Cost Sheet for Job 83 for the period December 16 through December 31.

7.

On December 31, journalize the following transactions*. Note that expenses (B), (C), and (D) were paid in cash.

A.	One months depreciation on equipment
B.	One months payroll for all employees
C.	One months rent of $2,000
D.	One months utilities of $1,275

8.

On December 31, prepare the journal entry to dispose of the balance in the Factory Overhead account.*

9.

What are the balances in the following accounts as of December 31?

A.	Materials
B.	Work in Process
C.	Finished Goods
D.	Factory Overhead
E.	Cost of Goods Sold
* Refer to the Chart of Accounts for exact wording of account titles.

Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity basefor her predetermined factory overhead rate, rather than machine hours (MH).

Estimated depreciation on equipment	$1,200.00
EstimatedtotalOfficeManager/KnittingSupervisorwages	$36,000.00
Estimated office utilities	$3,000.00
Estimated factory utilities	$4,800.00
Estimated factory rent	$24,000.00

Estimated number of DLH for the year	5,000
Estimated number of MH for the year	3,500

Calculate the predetermined factory overhead rate for the current year. If required, round your answers to the nearest cent.$9.60 per DLH Points: 1 / 1 Check My Work Review the definitions of items that are included in factory overhead for the calculation of estimated total factory overhead costs. Add the amounts in requirements 2(B), 3(C), and 6(C) to the appropriate areas of the job cost sheets below. If there is no amount or an amount is zero, enter "0". If required, round your answers to the nearest cent.

Job 62	100 units:	Sweaters
Direct Materials	Direct Labor	Factory Overhead	Total
BalanceDec.1	$5,000	$300	$104	$5,404
Dec. 15
Total Cost
Unit Cost

Points: 9 / 9 Check My Work Recall that the factory overhead is applied for this company using direct labor hours (DLH).

Job 83	200 units:	Sweater vests
Direct Materials	Direct Labor	Factory Overhead	Total Job Cost
BalanceDec.1	$0	$0	$0	$0
Dec. 10
Dec. 31
Total Cost

Points: 12 / 12 Check My Work Recall that the factory overhead is applied for this company using direct labor hours (DLH). Journalize the entries in requirements 2 - 8. Refer to the Chart of Accounts for exact wording of account titles. All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback. PAGE 15 JOURNAL Score: 118/287

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Points: 23.02 / 56 What are the balances in the following accounts as of December31?

Materials
Work in Process
Finished Goods
Factory Overhead
Cost of Goods Sold

Points: 1 / 5 Check My Work Create T accounts and post the beginning balances from the Nov. 30 Trial Balance panel. Then post your journal entries to get the Dec. 31 account balances.