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 $4,000, with the same anticipated useful life and salvage value. Nov. 30 Trial Balance POGP Company Trial Balance November 30, 2018 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 Ex 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 overend 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 Estimated factory utilities Estimated factory rent Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 $5,000 $4,800 $12,000 Compute the predetermined factory overhead rate for the current year. $7.80 per DLH Materials Requisition Req. No. 12255 Description Date: Dec. 10 Job No. 83 Qty. Issued Unit Price Amount Yarn type B 600 skeins $5 $3,000 Total issued $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 $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 12/16-12/31 83 88 58 $20 $1,500 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 No. Hours Worked Unit Price Amount 12/01-12/15 62 12/16-12/31 83 75 88 $20 $1,500 20 1,760 Total Cost $3,260 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/piecing Dates 12/01-12/15 12/16-12/31 Job No. Hours Worked Unit Price Amount 62 60 $20 $1,200 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. the you Cost Sheet for 200 63 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 0 4,000 V 1,560 5,320 X Total Cost 5,000 4,300 1,664 10,724 X Unit Cost 107.24 X Job 83 200 units: Sweater vests Direct Materials Direct Labor Factory Overhead Total Job Cost Balance Dec. 1 $0 $0 $0 $0 Dec. 10 3,000 3,000 Dec. 31 0 6,000 Total Cost 3,000 6,000 1,980 X 1,980 X 7,980 X 10,980 X Feedback Chuck Hun Check My Work 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 Work in Process Wages Payable Check My Work Correct 4,000 4,000 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 Work in Process Factory Overhead Feedback 1,320 X 1,320 X 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 Finished Goods Work in Process Check My Work Partially correct 10,724 X 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 Accounts Receivable Sales Dec. 22 Cost of Goods Sold Finished Goods Check Myrk Partially comac 9,375 9.375 043 x R04 X Feedback Finished Goods 8,043 X Check My Work Partially correct 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 Work in Process Frutback Wages Payable Ohed My Wo Comect 6,000 6,000 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 Work in Process Factory Overhead Check My Work 1,980 X 1980 X I. One mans Depre equipment b. One month's payroll for all employees c. One month's rent of $1,000 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank. Dec. 31 Factory Overhead Wages Expense 3,625 X 1,250 X 14,775 X 100 DDDD Wages Payable Cash Feedback Accumulated Depreciation-Equipment Check My Work Partially correct 10,000 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 Cost of Goods Sold 310 X Feedback Factory Overhead 310 X Check My Work Partially correct Final Question What are the balances in the following accounts as of December 31? If an amount is zero, enter "0". Materials Work in Process Finished Goods 2,000 10,980 X 2,681 X Factory Overhead Cost of Goods Sold 263,393 X Feedback Check My Wo Create T accounts and post the beginning balances from the Nov. 30 Trial Balance panel. Then post your journal entries to get the Dec. 31 account balances F Check My Work Partially correct