Mastery Problem Job Order Costing Purl of Great Price Company 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 knitter's time, the rest of the knitter's 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 Nov 30 Trial Balance POGP Company Trial Balance November 30, 20Y8 Account Title Debit Credit Cash 20,000 Accounts Receivable 1,000 Supplies 200 Materials 5,000 Work in Process 5,404 Equipment 12,000 Accumulated Depreciation Equipment 825 Accounts Payable 150 Common Stock 10,000 Retained Earnings 12,000 Dividends 18,096 Sales 307,500 Cost of Goods Sold 255,040 Factory Overhead 15 Wages Expense 13,750 330,490 330,490 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 $42,000 Estimated office utilities $6,000 Estimated factory utilities $4,800 Estimated factory rent $24,000 Activity Base Data Estimated number of DLH for the year 6,250 Estimated number of MH for the year 4,375 Compute the predetermined factory overhead rate for the current year $8 16 per DLH$11 66 per DLH$11 52 per DLH$12 48 per DLHAnother amount per DLH$12 48 per DLH Materials Requisition Date Dec 10 Req No 12255 Job No 83 Description Qty Issued Unit Price Amount Yarn type B 600skeins $5 $3,000 Totalissued $3,000 Time Ticket No 1255 Name Susan Blake Work Description Knitting piecing Dates Job No Hours Worked Unit Price Amount 12 01 12 15 62 65 $15 $975 12 16 12 31 83 103 15 1,545 Total Cost $2,520 Time Ticket No 2274 Name Josh Porter Work Description Knitting piecing Dates Job No Hours Worked Unit Price Amount 12 01 12 15 62 75 $15 $1,125 12 16 12 31 83 88 15 1,320 Total Cost $2,445 Time Ticket No 3923 Name Mary Jones Work Description Knitting piecing Dates Job No Hours Worked Unit Price Amount 12 01 12 15 62 60 $15 $900 12 16 12 31 83 109 15 1,635 Total Cost $2,535 Job Cost Sheets 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 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 Cost 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 Cost Sheet for Job 83 for the period December 16 through December 31 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 Balance Dec 1 $5,000 $300 $104 $5,404 Dec 15 fill in the blank 3b619eff7fd2ff2 1 fill in the blank 3b619eff7fd2ff2 2 fill in the blank 3b619eff7fd2ff2 3 fill in the blank 3b619eff7fd2ff2 4 Total Cost $fill in the blank 3b619eff7fd2ff2 5 $fill in the blank 3b619eff7fd2ff2 6 $fill in the blank 3b619eff7fd2ff2 7 $fill in the blank 3b619eff7fd2ff2 8 Unit Cost $fill in the blank 3b619eff7fd2ff2 9 Job 83 200 units Sweater vests Direct Materials Direct Labor Factory Overhead Total Job Cost Balance Dec 1 $0 $0 $0 $0 Dec 10 fill in the blank 3b619eff7fd2ff2 10 fill in the blank 3b619eff7fd2ff2 11 fill in the blank 3b619eff7fd2ff2 12 fill in the blank 3b619eff7fd2ff2 13 Dec 31 fill in the blank 3b619eff7fd2ff2 14 fill in the blank 3b619eff7fd2ff2 15 fill in the blank 3b619eff7fd2ff2 16 fill in the blank 3b619eff7fd2ff2 17 Total Cost $fill in the blank 3b619eff7fd2ff2 18 $fill in the blank 3b619eff7fd2ff2 19 $fill in the blank 3b619eff7fd2ff2 20 $fill in the blank 3b619eff7fd2ff2 21 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 CashCost of ServicesMaterialsFactory OverheadWork in ProcessWork in Process Work in Process Work in Process CashCost of ServicesMaterialsFactory OverheadWork in ProcessMaterials Materials Materials 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 Accounts ReceivableCashSalaries PayableWages PayableWork in ProcessWork in Process Work in Process Work in Process Accounts ReceivableCashSalaries PayableWages PayableWork in ProcessWages Payable Wages Payable Wages Payable 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 Accounts PayableAccounts ReceivableFactory OverheadSalaries PayableWork in ProcessWork in Process Work in Process Work in Process Accounts PayableAccounts ReceivableFactory OverheadSalaries PayableWork in ProcessFactory Overhead Factory Overhead Factory Overhead 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 Accounts PayableCashFinished GoodsFactory OverheadWork in ProcessFinished Goods Finished Goods Finished Goods Accounts PayableCashFinished GoodsFactory OverheadWork in ProcessWork in Process Work in Process Work in Process 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 CashAccounts ReceivableFactory OverheadSalesWork in ProcessAccounts Receivable Accounts Receivable Accounts Receivable CashAccounts ReceivableFactory OverheadSalesWork in ProcessSales Sales Sales Dec 22 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsCost of Goods Sold Cost of Goods Sold Cost of Goods Sold Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsFinished Goods Finished Goods Finished Goods 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 Accounts PayableAccounts ReceivableCost of ServicesWages PayableWork in ProcessWork in Process Work in Process Work in Process Accounts PayableAccounts ReceivableCost of ServicesWages PayableWork in ProcessWages Payable Wages Payable Wages Payable 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 Accounts PayableCashFactory OverheadSalaries PayableWork in ProcessWork in Process Work in Process Work in Process Accounts PayableCashFactory OverheadSalaries PayableWork in ProcessFactory Overhead Factory Overhead Factory Overhead 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 Accounts ReceivableAccumulated Depreciation EquipmentCashCost of ServicesFactory OverheadFactory Overhead Factory Overhead Factory Overhead Accounts ReceivableAccumulated Depreciation EquipmentCashCost of ServicesWages ExpenseAccumulated Depreciation Equipment Accumulated Depreciation Equipment Accumulated Depreciation Equipment Accounts ReceivableAccumulated Depreciation EquipmentCashCost of ServicesWages PayableWages Payable Wages Payable Wages Payable Accounts ReceivableCashFactory OverheadWages ExpenseWages PayableFactory Overhead Factory Overhead Factory Overhead Accounts ReceivableAccumulated Depreciation EquipmentFactory OverheadWages ExpenseWages Payable Select Select 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 Accounts ReceivableCashCost of Goods SoldFactory OverheadSalaries Payable Select Select Accounts ReceivableCashCost of Goods SoldFactory OverheadSalaries Payable Select Select Final Question What are the balances in the following accounts as of December31 If an amount is zero, enter 0 Materials $fill in the blank 57e0d1098fef079 1 Work in Process $fill in the blank 57e0d1098fef079 2 Finished Goods $fill in the blank 57e0d1098fef079 3 Factory Overhead $fill in the blank 57e0d1098fef079 4 Cost of Goods Sold $fill in the blank 57e0d1098fef079 5

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Mastery Problem: Job Order Costing Purl of Great Price Company Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which

Mastery Problem: Job Order Costing

Purl of Great Price Company

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 knitter's time, the rest of the knitter's 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.

Nov. 30 Trial Balance

POGP Company Trial Balance November 30, 20Y8
Account Title	Debit	Credit
Cash	20,000
Accounts Receivable	1,000
Supplies	200
Materials	5,000
Work in Process	5,404
Equipment	12,000
Accumulated Depreciation-Equipment		825
Accounts Payable		150
Common Stock		10,000
Retained Earnings		12,000
Dividends	18,096
Sales		307,500
Cost of Goods Sold	255,040
Factory Overhead		15
Wages Expense	13,750
	330,490	330,490

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	$42,000
Estimated office utilities	$6,000
Estimated factory utilities	$4,800
Estimated factory rent	$24,000

Activity Base Data
Estimated number of DLH for the year	6,250
Estimated number of MH for the year	4,375

Compute the predetermined factory overhead rate for the current year.

$8.16 per DLH$11.66 per DLH$11.52 per DLH$12.48 per DLHAnother amount per DLH$12.48 per DLH

Materials Requisition			Date: Dec. 10
Req. No. 12255	Job No. 83
Description	Qty. Issued	Unit Price	Amount
Yarn type B	600skeins	$5	$3,000
		Totalissued	$3,000

Time Ticket	No. 1255	Name:	Susan Blake
Work Description:	Knitting/piecing
Dates	Job No.	Hours Worked	Unit Price	Amount
12/01-12/15	62	65	$15	$975
12/16-12/31	83	103	15	1,545
			Total Cost	$2,520

Time Ticket	No. 2274	Name:	Josh Porter
Work Description:	Knitting/piecing
Dates	Job No.	Hours Worked	Unit Price	Amount
12/01-12/15	62	75	$15	$1,125
12/16-12/31	83	88	15	1,320
			Total Cost	$2,445

Time Ticket	No. 3923	Name:	Mary Jones
Work Description:	Knitting/piecing
Dates	Job No.	Hours Worked	Unit Price	Amount
12/01-12/15	62	60	$15	$900
12/16-12/31	83	109	15	1,635
			Total Cost	$2,535

Job Cost Sheets

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 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 Cost 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 Cost Sheet for Job 83 for the period December 16 through December 31.

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
Balance Dec. 1	$5,000	$300	$104	$5,404
Dec. 15	fill in the blank 3b619eff7fd2ff2_1	fill in the blank 3b619eff7fd2ff2_2	fill in the blank 3b619eff7fd2ff2_3	fill in the blank 3b619eff7fd2ff2_4
Total Cost	$fill in the blank 3b619eff7fd2ff2_5	$fill in the blank 3b619eff7fd2ff2_6	$fill in the blank 3b619eff7fd2ff2_7	$fill in the blank 3b619eff7fd2ff2_8
			Unit Cost	$fill in the blank 3b619eff7fd2ff2_9

Job 83	200 units:	Sweater vests
	Direct Materials	Direct Labor	Factory Overhead	Total Job Cost
Balance Dec. 1	$0	$0	$0	$0
Dec. 10	fill in the blank 3b619eff7fd2ff2_10	fill in the blank 3b619eff7fd2ff2_11	fill in the blank 3b619eff7fd2ff2_12	fill in the blank 3b619eff7fd2ff2_13
Dec. 31	fill in the blank 3b619eff7fd2ff2_14	fill in the blank 3b619eff7fd2ff2_15	fill in the blank 3b619eff7fd2ff2_16	fill in the blank 3b619eff7fd2ff2_17
Total Cost	$fill in the blank 3b619eff7fd2ff2_18	$fill in the blank 3b619eff7fd2ff2_19	$fill in the blank 3b619eff7fd2ff2_20	$fill in the blank 3b619eff7fd2ff2_21

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	CashCost of ServicesMaterialsFactory OverheadWork in ProcessWork in Process	Work in Process	Work in Process
	CashCost of ServicesMaterialsFactory OverheadWork in ProcessMaterials	Materials	Materials

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	Accounts ReceivableCashSalaries PayableWages PayableWork in ProcessWork in Process	Work in Process	Work in Process
	Accounts ReceivableCashSalaries PayableWages PayableWork in ProcessWages Payable	Wages Payable	Wages Payable

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	Accounts PayableAccounts ReceivableFactory OverheadSalaries PayableWork in ProcessWork in Process	Work in Process	Work in Process
	Accounts PayableAccounts ReceivableFactory OverheadSalaries PayableWork in ProcessFactory Overhead	Factory Overhead	Factory Overhead

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	Accounts PayableCashFinished GoodsFactory OverheadWork in ProcessFinished Goods	Finished Goods	Finished Goods
	Accounts PayableCashFinished GoodsFactory OverheadWork in ProcessWork in Process	Work in Process	Work in Process

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	CashAccounts ReceivableFactory OverheadSalesWork in ProcessAccounts Receivable	Accounts Receivable	Accounts Receivable
	CashAccounts ReceivableFactory OverheadSalesWork in ProcessSales	Sales	Sales
Dec. 22	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsCost of Goods Sold	Cost of Goods Sold	Cost of Goods Sold
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsFinished Goods	Finished Goods	Finished Goods

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	Accounts PayableAccounts ReceivableCost of ServicesWages PayableWork in ProcessWork in Process	Work in Process	Work in Process
	Accounts PayableAccounts ReceivableCost of ServicesWages PayableWork in ProcessWages Payable	Wages Payable	Wages Payable

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	Accounts PayableCashFactory OverheadSalaries PayableWork in ProcessWork in Process	Work in Process	Work in Process
	Accounts PayableCashFactory OverheadSalaries PayableWork in ProcessFactory Overhead	Factory Overhead	Factory Overhead

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	Accounts ReceivableAccumulated Depreciation-EquipmentCashCost of ServicesFactory OverheadFactory Overhead	Factory Overhead	Factory Overhead
	Accounts ReceivableAccumulated Depreciation-EquipmentCashCost of ServicesWages ExpenseAccumulated Depreciation-Equipment	Accumulated Depreciation-Equipment	Accumulated Depreciation-Equipment
	Accounts ReceivableAccumulated Depreciation-EquipmentCashCost of ServicesWages PayableWages Payable	Wages Payable	Wages Payable
	Accounts ReceivableCashFactory OverheadWages ExpenseWages PayableFactory Overhead	Factory Overhead	Factory Overhead
	Accounts ReceivableAccumulated Depreciation-EquipmentFactory OverheadWages ExpenseWages Payable	- Select -	- Select -

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	Accounts ReceivableCashCost of Goods SoldFactory OverheadSalaries Payable	- Select -	- Select -
	Accounts ReceivableCashCost of Goods SoldFactory OverheadSalaries Payable	- Select -	- Select -

Final Question

What are the balances in the following accounts as of December31? If an amount is zero, enter "0".

Materials	$fill in the blank 57e0d1098fef079_1
Work in Process	$fill in the blank 57e0d1098fef079_2
Finished Goods	$fill in the blank 57e0d1098fef079_3
Factory Overhead	$fill in the blank 57e0d1098fef079_4
Cost of Goods Sold	$fill in the blank 57e0d1098fef079_5