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 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.

Nov. 30 Trial Balance POGP Company Trial Balance November 30, 20Y8Account TitleDebitCreditCash20,000Accounts Receivable1,000Supplies200Materials5,000Work in Process5,404Equipment12,000Accumulated Depreciation-Equipment825Accounts Payable150Common Stock10,000Retained Earnings12,000Dividends18,096Sales307,500Cost of Goods Sold255,040Factory Overhead15Wages Expense13,750330,490330,490 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 YearEstimated depreciation on equipment$1,200Estimated total Office Manager/Knitting Supervisor wages$36,000Estimated office utilities$6,000Estimated factory utilities$4,800Estimated factory rent$24,000 Activity Base DataEstimated number of DLH for the year6,250Estimated number of MH for the year4,375 Compute the predetermined factory overhead rate for the current year. $7.68 per DLH

Feedback

Review the definitions of items that are included in factory overhead for the computation of estimated total factory overhead costs.

Materials RequisitionDate: Dec. 10Req. No. 12255Job No. 83DescriptionQty. IssuedUnit PriceAmountYarn type B700 skeins$5$3,500Total issued$3,500 Time TicketNo. 1255Name:Susan BlakeWork Description:Knitting/piecingDatesJob No.Hours WorkedUnit PriceAmount12/01-12/1562 65 $20 $1,30012/16-12/3183 103 20 2,060Total Cost$3,360 Time TicketNo. 2274Name:Josh PorterWork Description:Knitting/piecingDatesJob No.Hours WorkedUnit PriceAmount12/01-12/156275$20$1,50012/16-12/318388201,760Total Cost$3,260 Time TicketNo. 3923Name:Mary JonesWork Description:Knitting/piecingDatesJob No.Hours WorkedUnit PriceAmount12/01-12/1562 60 $20$1,20012/16-12/3183 109 202,180Total Cost$3,380 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 62100 units:SweatersDirect MaterialsDirect LaborFactory OverheadTotalBalance Dec. 1$5,000$300$104$5,404Dec. 15Total Cost$$$$Unit Cost$ Job 83200 units:Sweater vestsDirect MaterialsDirect LaborFactory OverheadTotal Job CostBalance Dec. 1$0$0$0$0Dec. 10Dec. 31Total Cost$$$$

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

Feedback

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

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Incorrect

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

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Incorrect

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

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Incorrect

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 Dec. 22

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Incorrect

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

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Incorrect

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

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Incorrect

On December 31, journalize the following transactions. Note that expenses (b), (c), an

mastery Problemi Job Order Costing of Great Price Company Haris Young is the cheerful of Gear Price Company (PGP Company, which produces high-end knitted sweaters and sweater vests for sale to real outlets. The company started in any of the current yest and my three kriters uch of whom 40 hours per week and one getting supervisor this episy works 20 hours per week office manager and 20 hours per week as knitting supery). Al wages are paid in cash at the end of each month Sachkriterios machine that is used about 23 of the time, the rest of the kriter's time being involved in hand knitting and pong together the garments. The company asos pacing machine used to wrap the garments in oping with operated by the office momenting supervisor approximately 5 hours per week The nitting machines were purchased on anary of the current year, and cost $2,400 each with anticipade of 10 years and malvaevue The packaging machine was purch on the same date and cost $4,000, with the same antidecure and salge value Now, oral Balance POGP Company Trial Balance orillier , VII Crni 20.000 1,000 Ros Recent Supplies Materials Work Process Loupent MOOI 200 1000 5.404 12.000 825 150 As wrote Com 10,000 10,000 Common Stock Retained Latings 12.000 Dividends 18,096 307,500 255.040 Cost of Goods Sold Factory Overhead Wages Expense 15 13,750 300,490 330,490 Predetermined Factory Overhead Rate Since the company is more reliant on labor then machines, Maria decides to use direct labor hours (CLH) 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 536,000 Estimated office utilities $5,000 Estimated factory utilities $4,300 Estimated factory rent $24.000 Activity Base Data Estimated number of DL for the year Estimated number of Mit for the year 6,250 4,375 Compute the predetermined factory overhead rate for the current year. $7.6 per DLH Materials Requisition Date: Dec. 10 Reg. No. 12255 Job No. 83 Description Qty. Issued Unit Price Amount Yarn type B 700 skeins $5 $3,500 Total issued $3,500 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 $20 $1,300 12/16-12/31 83 103 20 2,060 Total Cost $3,360 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 $20 $1,500 12/16-12/31 83 88 20 1,760 Total Cost $3,260 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount Dates Job Ne 12/01 12/15 62 Hours Worked Unit Price Amount 60 $1,200 109 20 2.180 12/16-12/31 83 Total Cost $3,300 Job Cast Sheets On December 10, POP Company receives an order for 200 sweater vests and assigns Job 83 to the order. Review the Materials Rustion table to add the materials to the Job Cost Sheet for Bob On December 15, review the Time Ticket tables to add the appropriate amount of direct labor and factory overhead costs to the lob Cost Sheet for Job 2 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 3 for the period December 16though December 31 If there is no amount or an amount is zero, enter"O". If required, round your answers to the nearest cent. Job 62 100 units: Sweaters Direct Materials Direct Labor 5,000 $300 Factory Overhead Total 5104 $5,404 Balance Dec. 1 Dec 15 Total Cost Unit Cost Job 3 Sweat wsts 200 units Direct Materials Total Job Cost Direct Labor Factory Overhead $0 SO $0 $0 Balance Dec. 1 3.500 3,500 Dec. 10 Dr. 31 Dec. 10 3,500 3,500 Dec, 11 Total Cost Journal On December 10, POGP Company receives an order for 200 sweater vests and assigns lob 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 Check Work Think about the low of costs incurred to do a job and the accounts afected by sales in oustomers On December 15, review the Time Ticket tables to journalize the entry to record the addition of direct linbor to Work in Process for the period December through December 15. If an amount box does not require an entry leavet Blank Dec. 15 Festa On December 15, review the Time Ticket tables to joumalize the entry to record the addition of factory overhead to Work in Process for the period Comer through December 15. 1f an amount box does not require an entry leave it bank Dec. 15 F Income On December 21, ob 62 is completed. Review the Job Cost Sheets and your ournal ones. Joumalize the entry to move the associated cost to the finished goods account. If an amount to do it require an entry leave it tak Dec, 21 Check My W income On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each Journalce the following transactio a. The entry to record the sale b. The entry to record the transfer of costs from shed Goods to cost of Goods Sold If an amount box does not require an entry leave it blank Dec Dec. 22 II ID II II Dec. 22 Tehack Income 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 11. If an amount box does not require an entry, leave it blank Dec. 31 Fedad Check My W Incorrect 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 1 famount box does not require an entry, leave it blank Dec. 31 Dec. 31 Feedback Check My Work Incorrect 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 Feedback Check My Work On December 31, prepare the journal entry to dispose of the balance in the factory overhead account. If an amount bax does not require an entry, leave it blank. Dec. 31 Feedback Check My Work Incorred Final Question What are the balances in the following accounts as of December 317 If an amount is zero, enter"0" Materials Work in Process Finished Goods Factory Overhead Cost of Goods Sold Feedback Check My Work Create accounts and post the beginning balances from the Nov. 30 Trial Balance panel. The post your journal entries to get the Dec 31 account balances mastery Problemi Job Order Costing of Great Price Company Haris Young is the cheerful of Gear Price Company (PGP Company, which produces high-end knitted sweaters and sweater vests for sale to real outlets. The company started in any of the current yest and my three kriters uch of whom 40 hours per week and one getting supervisor this episy works 20 hours per week office manager and 20 hours per week as knitting supery). Al wages are paid in cash at the end of each month Sachkriterios machine that is used about 23 of the time, the rest of the kriter's time being involved in hand knitting and pong together the garments. The company asos pacing machine used to wrap the garments in oping with operated by the office momenting supervisor approximately 5 hours per week The nitting machines were purchased on anary of the current year, and cost $2,400 each with anticipade of 10 years and malvaevue The packaging machine was purch on the same date and cost $4,000, with the same antidecure and salge value Now, oral Balance POGP Company Trial Balance orillier , VII Crni 20.000 1,000 Ros Recent Supplies Materials Work Process Loupent MOOI 200 1000 5.404 12.000 825 150 As wrote Com 10,000 10,000 Common Stock Retained Latings 12.000 Dividends 18,096 307,500 255.040 Cost of Goods Sold Factory Overhead Wages Expense 15 13,750 300,490 330,490 Predetermined Factory Overhead Rate Since the company is more reliant on labor then machines, Maria decides to use direct labor hours (CLH) 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 536,000 Estimated office utilities $5,000 Estimated factory utilities $4,300 Estimated factory rent $24.000 Activity Base Data Estimated number of DL for the year Estimated number of Mit for the year 6,250 4,375 Compute the predetermined factory overhead rate for the current year. $7.6 per DLH Materials Requisition Date: Dec. 10 Reg. No. 12255 Job No. 83 Description Qty. Issued Unit Price Amount Yarn type B 700 skeins $5 $3,500 Total issued $3,500 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 $20 $1,300 12/16-12/31 83 103 20 2,060 Total Cost $3,360 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 $20 $1,500 12/16-12/31 83 88 20 1,760 Total Cost $3,260 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount Dates Job Ne 12/01 12/15 62 Hours Worked Unit Price Amount 60 $1,200 109 20 2.180 12/16-12/31 83 Total Cost $3,300 Job Cast Sheets On December 10, POP Company receives an order for 200 sweater vests and assigns Job 83 to the order. Review the Materials Rustion table to add the materials to the Job Cost Sheet for Bob On December 15, review the Time Ticket tables to add the appropriate amount of direct labor and factory overhead costs to the lob Cost Sheet for Job 2 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 3 for the period December 16though December 31 If there is no amount or an amount is zero, enter"O". If required, round your answers to the nearest cent. Job 62 100 units: Sweaters Direct Materials Direct Labor 5,000 $300 Factory Overhead Total 5104 $5,404 Balance Dec. 1 Dec 15 Total Cost Unit Cost Job 3 Sweat wsts 200 units Direct Materials Total Job Cost Direct Labor Factory Overhead $0 SO $0 $0 Balance Dec. 1 3.500 3,500 Dec. 10 Dr. 31 Dec. 10 3,500 3,500 Dec, 11 Total Cost Journal On December 10, POGP Company receives an order for 200 sweater vests and assigns lob 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 Check Work Think about the low of costs incurred to do a job and the accounts afected by sales in oustomers On December 15, review the Time Ticket tables to journalize the entry to record the addition of direct linbor to Work in Process for the period December through December 15. If an amount box does not require an entry leavet Blank Dec. 15 Festa On December 15, review the Time Ticket tables to joumalize the entry to record the addition of factory overhead to Work in Process for the period Comer through December 15. 1f an amount box does not require an entry leave it bank Dec. 15 F Income On December 21, ob 62 is completed. Review the Job Cost Sheets and your ournal ones. Joumalize the entry to move the associated cost to the finished goods account. If an amount to do it require an entry leave it tak Dec, 21 Check My W income On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each Journalce the following transactio a. The entry to record the sale b. The entry to record the transfer of costs from shed Goods to cost of Goods Sold If an amount box does not require an entry leave it blank Dec Dec. 22 II ID II II Dec. 22 Tehack Income 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 11. If an amount box does not require an entry, leave it blank Dec. 31 Fedad Check My W Incorrect 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 1 famount box does not require an entry, leave it blank Dec. 31 Dec. 31 Feedback Check My Work Incorrect 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 Feedback Check My Work On December 31, prepare the journal entry to dispose of the balance in the factory overhead account. If an amount bax does not require an entry, leave it blank. Dec. 31 Feedback Check My Work Incorred Final Question What are the balances in the following accounts as of December 317 If an amount is zero, enter"0" Materials Work in Process Finished Goods Factory Overhead Cost of Goods Sold Feedback Check My Work Create accounts and post the beginning balances from the Nov. 30 Trial Balance panel. The post your journal entries to get the Dec 31 account balances