Mastery Problem: Job Order Costing Purt 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 Ench 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 plecing 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 3 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 54,800, with the same anticipated useful life and salvage value Nov. 30 Trial Balance POGP Company Trial Balance November 30, 20YS 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 025 Accounts Payable Common Stock 10,000 12.000 150 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, 2018 Account Title Debit Credit 20,000 1,000 200 5,000 5,404 12,000 825 Cash Accounts Receivable Supplies Materials Work in Process Equipment Accumulated Depreciation-Equipment Accounts Payable Common Stock Retained Earnings Dividends Sales Cost of Goods Sold Factory Overhead Wages Expense 150 10,000 12,000 18,096 307,500 255,040 15 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 (OLH) 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/Knitung Supervisor wages $36,000 Estimated office utilities 55.000 Estimated factory utilities $4,300 Estimated factory rent $18.000 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 Date: Dec, 10 > Materials Requisition Req, No. 12255 Job No. 83 Description Qty. Issued Unit Price Yarn type B 600 skins $$ Amount $3,000 Total issued 53,000 Time Ticket No. 1255 Name: Susan Blake Work DescriptionKnitting/placing Dates Job No. Hours Worked Unit Price Amount Time Ticket No. 1255 Name: Susan Blake Work Description: Knitting/piecing Dates Job No. 12/01-12/15 62 12/16-12/31 83 Hours Worked Unit Price Amount 65 $20 $1,300 103 20 2,060 Total Cost $3,360 Name: Josh Porter Time Ticket No. 2274 Work Description: Knitting/piecing Dates Job No. 62 12/01-12/15 12/16-12/31 Hours Worked Unit Price Amount 75 $20 $1,500 88 20 1,760 Total Cost $3,260 83 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/placing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 60 520 $1,200 12/16-12/31 83 109 20 2,180 Total 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 overhand 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 "o". 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 5104 $5,404 Dec. 15 Total Cost Unit Cost Job 83 200 units: Sweater vests Direct Materials Direct Labor Factory Overhead Total Job Cost 30 30 Balance Dec. 1 SO 50 Dec. 10 Dec, 23 Total Cost Anal 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 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 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 On December 21, 3ob in completed, www the Job Cost Sheets and your journal entries. Journalize the entry timove the associated costs to the Prishad good account. If an amount box does not require an entry, leave it blank Dec. 21 On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each. Journalize the following transactions 1. 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 22, 75 of the 100 sweaters from Job 62 are sold an account for $125 each. Journalize the following transaction a. The entry to record the sale. D. 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 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 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 blank. Dec 31 On December 31, journalize the following transactions. Note that expenses (b), (c), and (d) were paid in cash One month's depreciation on equipment b. One month's payroll for all employees On December 31, journalize the following transactions. Note that expenses (b), (c) and (d) were paid in cash .. One month's depreciation on equipment b. One month's payroll for all employees c. One month's rent of $1.500 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank Dec. 31 On December 31, prepare the joumal entry to dispose of the balance in the factory overhead account. If an amount box does not require an entry, save it blank Dec. 31 88 Final Question What are the balances in the following accounts as of December 317 sf an amount is zero, enter " Materials Work in Process Finished Goods Factory Overhead Mastery Problem: Job Order Costing Purt 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 Ench 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 plecing 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 3 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 54,800, with the same anticipated useful life and salvage value Nov. 30 Trial Balance POGP Company Trial Balance November 30, 20YS 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 025 Accounts Payable Common Stock 10,000 12.000 150 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, 2018 Account Title Debit Credit 20,000 1,000 200 5,000 5,404 12,000 825 Cash Accounts Receivable Supplies Materials Work in Process Equipment Accumulated Depreciation-Equipment Accounts Payable Common Stock Retained Earnings Dividends Sales Cost of Goods Sold Factory Overhead Wages Expense 150 10,000 12,000 18,096 307,500 255,040 15 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 (OLH) 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/Knitung Supervisor wages $36,000 Estimated office utilities 55.000 Estimated factory utilities $4,300 Estimated factory rent $18.000 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 Date: Dec, 10 > Materials Requisition Req, No. 12255 Job No. 83 Description Qty. Issued Unit Price Yarn type B 600 skins $$ Amount $3,000 Total issued 53,000 Time Ticket No. 1255 Name: Susan Blake Work DescriptionKnitting/placing Dates Job No. Hours Worked Unit Price Amount Time Ticket No. 1255 Name: Susan Blake Work Description: Knitting/piecing Dates Job No. 12/01-12/15 62 12/16-12/31 83 Hours Worked Unit Price Amount 65 $20 $1,300 103 20 2,060 Total Cost $3,360 Name: Josh Porter Time Ticket No. 2274 Work Description: Knitting/piecing Dates Job No. 62 12/01-12/15 12/16-12/31 Hours Worked Unit Price Amount 75 $20 $1,500 88 20 1,760 Total Cost $3,260 83 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/placing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 60 520 $1,200 12/16-12/31 83 109 20 2,180 Total 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 overhand 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 "o". 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 5104 $5,404 Dec. 15 Total Cost Unit Cost Job 83 200 units: Sweater vests Direct Materials Direct Labor Factory Overhead Total Job Cost 30 30 Balance Dec. 1 SO 50 Dec. 10 Dec, 23 Total Cost Anal 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 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 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 On December 21, 3ob in completed, www the Job Cost Sheets and your journal entries. Journalize the entry timove the associated costs to the Prishad good account. If an amount box does not require an entry, leave it blank Dec. 21 On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each. Journalize the following transactions 1. 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 22, 75 of the 100 sweaters from Job 62 are sold an account for $125 each. Journalize the following transaction a. The entry to record the sale. D. 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 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 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 blank. Dec 31 On December 31, journalize the following transactions. Note that expenses (b), (c), and (d) were paid in cash One month's depreciation on equipment b. One month's payroll for all employees On December 31, journalize the following transactions. Note that expenses (b), (c) and (d) were paid in cash .. One month's depreciation on equipment b. One month's payroll for all employees c. One month's rent of $1.500 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank Dec. 31 On December 31, prepare the joumal entry to dispose of the balance in the factory overhead account. If an amount box does not require an entry, save it blank Dec. 31 88 Final Question What are the balances in the following accounts as of December 317 sf an amount is zero, enter " Materials Work in Process Finished Goods Factory Overhead