Master Problem Job order coasting 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 Rate panel, and compute 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 Requisition panel A Journalize the entry to record the addition of the materials to Work in Process B On the Job Cost Sheets panel, add the materials to the Job Cost Sheet for Job 83 3 On December 15, 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 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 $1,500 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 POGP Company UNADJUSTED TRIAL BALANCE November 30, 20Y8 ACCOUNT TITLE DEBIT CREDIT Cash 1 20,000 00 Accounts Receivable 2 1,000 00 Supplies 3 200 00 Materials 4 5,000 00 Work in Process 5 5,404 00 Equipment 12,000 00 6 Accumulated Depreciation Equipment 825 00 7 150 00 Accounts Payable 8 10,000 00 Common Stock 9 12,000 00 10 Retained Earnings 18,096 00 Dividends 11 307,500 00 Sales 12 255,040 00 Cost of Goods Sold 13 15 00 14 Factory Overhead 13,750 00 15 Wages Expense 330,490 00 330,490 00 Totals 16 Mastery Problem Job Order Costing 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 $1,200,00 Estimated total Office Manager Knitting Supervisor wages $30,000,00 Estimated office utilities $6,000 00 Estimated factory utilities $4 800,00 Estimated factory rent $18,000 00 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 the current year If required, round your answers to the nearest cent Compute the predetermined factory overhead rate Mastery Problem Job Order Costing Materials Requisition Materials Requisition Date Dec 10 Req No 12255 Job No 83 Qty Issued Unit Price Description Amount Yarn type B $5 00 $3,500 700 skeins $3,500 Total issued Time Tickets Time Ticket No 1255 Name Susan Blake Work Description Knitting piecing Dates Job No Hours Worked Unit Price Amount 12 01 12 15 62 $15 00 65 $975 00 12 16 12 31 83 103 $15 00 $1,545 00 $2,520 00 Total Cost Time Ticket No 2274 Name Josh Porter Work Description Knitting piecing Amount Hours Worked Unit Price Job No Dates $15 00 $1,125 00 75 62 12 01 12 15 $1,320 00 $15 00 88 83 12 16 12 31 Total Cost $2,445 00 Mary Jones Name No 3923 Time Ticket Work Description Knitting piecing Amount Hours Worked Unit Price Job No Dates $15 00 $900 00 60 62 12 01 12 15 $1,635 00 $15 00 109 83 12 16 12 31 $2,535 00 Total Cost Mastery Problem Job Order Costing Job Cost Sheets Add the amounts in requirements 2(B), 3(C), and 6(C) to the appropriate areas of the following job cost sheets If there is no amount or an amount is zero, enter 0 If required, round your a Job 62 100 units Sweaters Direct Materials Direct Labor Factory Overhead Total $5,000 $104 $5,404 Balance Dec 1 $300 $ $ $ $ Dec 15 $ $ $ $ Total Cost $ Unit Cost Sweater vests 200 units Job 83 Total Job Cost Factory Overhead Direct Labor Direct Materials $0 $0 $0 $0 Balance Dec 1 $ $ $ $ Dec 10 $ $ $ $ Dec 31 $ $ Total Cost Journal X Journalize the entries in requirements 2 8 Refer to the Chart of Accounts for exact wording of account titles PAGE 15 ACCOUNTING EQUATION JOURNAL EQUITY LIABILITIES ASSETS CREDIT POST REF DEBIT DATE DESCRIPTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Mastery Problem Job Order Costing Final Question What are the balances in the following accounts as of December 31 Materials Work in Process Finished Goods $ Factory Overhead Cost of Goods Sold $

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Master Problem: Job order coasting: Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces high-end knitted sweaters and

Master Problem: Job order coasting:

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:

Review the data in the Predetermined Factory Overhead Rate panel, and compute the predetermined factory overhead rate for POGP Company.

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

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

On December 15, 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 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.

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.*

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.

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.

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 $1,500
D.	One months utilities of $1,275

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

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.

image text in transcribed

POGP Company UNADJUSTED TRIAL BALANCE November 30, 20Y8 ACCOUNT TITLE DEBIT CREDIT Cash 1 20,000.00 Accounts Receivable 2 1,000.00 Supplies 3 200.00 Materials 4 5,000.00 Work in Process 5 5,404.00 Equipment 12,000.00 6 Accumulated Depreciation-Equipment 825.00 7 150.00 Accounts Payable 8 10,000.00 Common Stock 9 12,000.00 10 Retained Earnings 18,096.00 Dividends 11 307,500.00 Sales 12 255,040.00 Cost of Goods Sold 13 15.00 14 Factory Overhead 13,750.00 15 Wages Expense 330,490.00 330,490.00 Totals 16 Mastery Problem: Job Order Costing 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 $1,200,00 Estimated total Office Manager/Knitting Supervisor wages $30,000,00 Estimated office utilities $6,000.00 Estimated factory utilities $4.800,00 Estimated factory rent $18,000.00 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 the current year. If required, round your answers to the nearest cent. Compute the predetermined factory overhead rate Mastery Problem: Job Order Costing Materials Requisition Materials Requisition Date: Dec. 10 Req. No. 12255 Job No. 83 Qty.Issued Unit Price Description Amount Yarn type B $5.00 $3,500 700 skeins $3,500 Total issued Time Tickets Time Ticket No. 1255 Name: Susan Blake Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 $15.00 65 $975.00 12/16-12/31 83 103 $15.00 $1,545.00 $2,520.00 Total Cost Time Ticket No. 2274 Name: Josh Porter Work Description: Knitting/piecing Amount Hours Worked Unit Price Job No. Dates $15.00 $1,125.00 75 62 12/01-12/15 $1,320.00 $15.00 88 83 12/16-12/31 Total Cost $2,445.00 Mary Jones Name: No. 3923 Time Ticket Work Description : Knitting/piecing Amount Hours Worked Unit Price Job No. Dates $15.00 $900.00 60 62 12/01-12/15 $1,635.00 $15.00 109 83 12/16-12/31 $2,535 .00 Total Cost Mastery Problem: Job Order Costing Job Cost Sheets Add the amounts in requirements 2(B), 3(C), and 6(C) to the appropriate areas of the following job cost sheets. If there is no amount or an amount is zero, enter 0.If required, round your a Job 62 100 units: Sweaters Direct Materials Direct Labor Factory Overhead Total $5,000 $104 $5,404 Balance Dec. 1 $300 $ $ $ $ Dec. 15 $ $ $ $ Total Cost $ Unit Cost Sweater vests 200 units: Job 83 Total Job Cost Factory Overhead Direct Labor Direct Materials $0 $0 $0 $0 Balance Dec. 1 $ $ $ $ Dec. 10 $ $ $ $ Dec. 31 $ $ Total Cost Journal X Journalize the entries in requirements 2-8. Refer to the Chart of Accounts for exact wording of account titles. PAGE 15 ACCOUNTING EQUATION JOURNAL EQUITY LIABILITIES ASSETS CREDIT POST. REF DEBIT DATE DESCRIPTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Mastery Problem: Job Order Costing Final Question What are the balances in the following accounts as of December 31? Materials Work in Process Finished Goods $ Factory Overhead Cost of Goods Sold $