Question $1(200$ points$)$

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Question $1$ options:

Data $1$ You work for Thunderduck Custom Tables Inc. This is the first month of operations. The company designs and manufactures specialty tables. Each table is specially customized for the customer. This month, you have been asked to develop and manufacture two new tables for customers. You will design and build the tables. The company does not have indirect materials. You will keep track of the costs incurred to manufacture the tables using Job #$1$ Cost Sheet and Job #$2$ Cost Sheet.

The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours. The total estimated manufacturing overhead costs per month is $$7,800.$ The company estimates that there will be $120$ direct labor hours worked during the month.

$1-$ What is the predetermined overhead rate $($POHR$)?$

$65$

Data $2$: The cost of the direct materials that can be used to manufacture the table are as follows.

Table Top $$1,400$

Table legs, quantity $4($$$400$ per leg$)$ $$1,600$

Drawer $$340$

Data $3$: Assume a $$65$ per hour wage rate to the assembly employees.

Step $1$ The following is a list of transactions that need to be recorded for the company for activity in the month of December. Record each journal entry in the "General Journal" tab of the excel file using the proper format. Please use the following accounts:

Accounts payable Depreciation expense Salaries and wages expense

Accounts receivables Finished goods Salaries and wages payable

Accumulated depreciation Insurance expense Advertising expense

Manufacturing overhead Work in process Cost of goods sold

Raw materials Sales revenue

Dec $1$: Raw materials purchased on account, $$14,000$

Dec $5$: The first order you received was to manufacture a table using a table top and four legs. This is your Job #$1.$ All raw materials needed for Job #$1$ were requested from the material storage for use during the month. All materials are direct. $($After you journalize this entry please enter the information into Job #$1$ Cost Sheet$)$

Dec $10$:

The following employee costs were incurred but not paid during the month:

Direct labor for Job #$1,$ consisted of $60$ hours at a rate of $$65$ per hour, totaling $$3,900.($After you journalize this entry please enter the information into Job #$1$ Cost Sheet$)$

Salary for factory supervisor $$2,500.$

Administrative salary $$1,900.$

Dec $12$: Manufacturing overhead cost was applied based on direct labor hours to Job #$1$ using the POHR calculated in Question $1.($After you journalize this entry please enter the information into Job #$1$ Cost Sheet$)$

Dec $15$: The second order you received was to manufacture a table using a table top, four legs and a drawer. This is your Job #$2.$ All raw materials needed for Job #$2$ were requested from the material storage for use during the month. All materials are direct. $($After you journalize this entry please enter the information into Job #$2$ Cost Sheet$)$

Dec $16$: Factory rent incurred but not paid for the month was $$900.$

Dec $17$: Advertising costs incurred but not paid for the month was $$1,400.$

Dec $20$: Depreciation on equipment for the month of December was $$1,850($$$1,450$ for equipment used in the factory and $$400$ for equipment used in selling and administrative activities$).$

Dec $23$: Property insurance incurred but not paid $$2,100($$$1,600$ for the factory and $$500$ for selling and administrative offices$).$

Dec $26$: Job #$1$ was completed and transferred to Finished Goods during the month.

Dec $28$: The completed table from Job #$1$ was sold on account to the customer for $$19,000$ during the month. $($Hint: Make sure to account for the cost of the table that was sold using the cost from the job cost sheet.$)$

Dec $31$: By the end of the month, $30$ hours of direct labor were incurred at a rate of $$65$ per hour, totaling $$1,950$ to begin production on job #$2.$ The employees will be paid next month. $($After you journalize this entry please enter the information into Job #$2$ Cost Sheet$)$

Dec $31$: Manufacturing overhead cost was applied using the direct labor hours from Job #$2$ and the POHR calculated in Question $1.($After you journalize this entry please enter the information into Job #$2$ Cost Sheet$)$

Step $2$

Post the journal entries that you recorded on the "General Journal" tab to the $"$T$-$accounts $($General Ledger$)"$ tab and calculate the ending balance for each account. This is the company's first month of business, so there will not be any beginning balances.

Next, prepare the following journal entry:

Dec $31$: Record the entry in the general journal to close the Manufacturing Overhead account and adjust for overapplied$/$underapplied overhead.

Step $3$ Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold on the "Schedule of COGM and COGS" tab for Job #$1$ and Job #$2$ that were worked on during the month by the company. Make sure to follow the format noted in