please see attached.
Problem 191A Lemmon Co.'s March 31 inventory of raw materials is $170,000. Raw materials purchases in April are $310,000, and factory payroll cost in April is $224,000. Overhead costs incurred in April are: indirect materials, $25,000; indirect labor, $19,000; factory rent, $25,000; factory utilities, $13,000; and factory equipment depreciation, $41,000. The predetermined overhead rate is 65% of direct labor cost. Job 306 is sold for $400,000 cash in April. Costs of the three jobs worked on in April follow. Required 1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31). 2. Prepare journal entries for the month of April to record the following. a. Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.) b. Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory. c. Transfer of Jobs 306 and 307 to the Finished Goods Inventory. d. Cost of goods sold for Job 306. e. Revenue from the sale of Job 306. f. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.) 3. Prepare a manufacturing statement for April (use a single line presentation for direct materials and show the details of overhead cost). 4. Compute gross profit for April. Show how to present the inventories on the April 30 balance sheet. Analysis Component 5. The over or underapplied overhead is closed to Cost of Goods Sold. Discuss how this adjustment impacts business decision making regarding individual jobs or batches of jobs Problem 18-5A Refer to Decision Maker, Purchase Manager, in this chapter. Assume that you are the motorcycle manufacturer's managerial accountant. The purchasing manager asks you about preparing an estimate of the related costs for buying motorcycle seats from supplier (B). She tells you this estimate is needed because unless dollar estimates are attached to nonfinancial factors, such as lost production time, her supervisor will not give it full attention. The manager also shows you the following information. Production output is 1,000 motorcycles per year based on 250 production days a year. Average contribution margin per motorcycle is $3,000. Production time per day is 8 hours at a cost of $2,000 per hour to run the production line. Lost production time due to poor quality is 1%. Satisfied customers purchase, on average, three motorcycles during a lifetime. Satisfied customers recommend the product, on average, to five other people. Marketing predicts that using seat (B) will result in five lost customers per year from repeat business and referrals. Required Estimate the costs (including opportunity costs) of buying motorcycle seats from supplier (B). This problem requires that you think creatively and make reasonable estimates; thus there could be more than one correct answer. (Hint: Reread the answer to Decision Maker and compare the cost savings for buying from supplier [B] to the sum of lost customer revenue from repeat business and referrals and the cost of lost production time.)
