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Question 1 Sampson Company uses a job order cost system with overhead applied based on direct labor hours.See estimated amounts below. Note the beginning balances

Question 1

Sampson Company uses a job order cost system with overhead applied based on direct labor hours.See estimated amounts below. Note the beginning balances for Finished Goods (Job 101) and Work-in-Process (Jobs 102 & 103) for the costs accumulated to date. Also note, the beginning balances in the other balance sheet accounts.
Estimated Overhead for 2018 720,000
Estimated Direct Labor Hours for 2014 24,000
During January the company had the following transactions:
(a) Purchased raw materials on account in the amount of: 10,000
(b) Issued the following materials into production:
Amount Explanation
Direct materials 7,000 Job 102 2,000
Job 103 5,000
Indirect materials 2,000 Used on both jobs.
Total 9,000
(c) Recorded salaries and wages as follows:
Amount Explanation
Direct labor 10,000 Job 102 6,000
Job 103 4,000
Indirect labor 4,000 For factory supervision
Salaries 5,000 For administrative staff
Total 19,000
(d) Applied overhead to jobs based on the number of direct labor hours required
Job Number Direct labor hours
Job 102 300
Job 103 200
Total 500
(e) Recorded the following actual manufacturing costs:
Amount Explanation
Rent 6,000 Paid factory rent in cash
Depreciation 5,000 Factory equipment
Insurance 3,000 Had one month of factory insurance policy expire
Utilities 2,000 Received factory utility bill but did not pay it.
Total 16,000
(f) Recorded the following general and administrative costs:
Amount Explanation
Advertising 2,000 Advertising paid in cash
Depreciation 3,000 Office equipment
Other expenses 1,000 Miscellaneous expense incurred but not paid.
Total 6,000
(g) Sold Job 101, which is recorded in Finished Goods:
Sales Price 55,000
Cost 30,000
(h) Completed Job 102 but did not sell it; Job 103 is still in process at year-end.
Required:
1 Compute the predetermined overhead rate.
Predetermined overhead rate
2 Compute how much overhead would be applied to jobs during the period:
Overhead applied
3 Compute the total cost of Jobs 102 and 103 at the end of the period. You will enter your calculation in the 'Ledger Accounts' tab of this workbook.
Where will the cost of each of these jobs appear on the Balance sheet?
4 Post the journal entries to the 'T' Accounts in the 'Ledger Accounts' tab. Calculate the ending balances in all of the accounts.
5 Calculate the amount of over- or underapplied overhead in the 'Ledger Accounts' tab.
6 Post the journal entry in the T accounts to dispose of the overhead balance in the 'Ledger Accounts' tab.
7 Prepare statement of cost of goods manufactured report in the 'Reports' tab.
8 Prepare income statement in the 'Reports' tab.
9 Prepare basic balance sheet in the 'Reports' tab.

Question 2

Raw Materials Inventory Manufacturing Overhead
1/1/18 (Beg) 10,000
Work in Process Inventory Job Sheet: 102 Job Sheet: 103
1/1/18 (Beg) 15,000 1/1/18 (Beg) 15,000 0
Finished Goods Cost of Goods Sold
1/1/18 (Beg) 30,000
Sales Revenue Selling, General, and Administrative Expenses
Cash and Other Assets Payables and Other Liabilities
1/1/18 (Beg) 100,000 85,000 1/1/18 (Beg)
Stockholders' Equity
70,000 1/1/18 (Beg)

Question 3

7 Sampson Company
Cost of Goods Manufactured Report
For the Month of January
Beginning Raw Materials Inventory
Plus: Raw Material Purchases
Less: Indirect Material Used
Less: Ending Raw Materials Inventory
Direct Materials Used in Production
Direct Labor
Manufacturing Overhead
Total Current Manufacturing Costs
Plus: Beginning Work in Process Inventory
Total Work in Process
Less: Ending Work in Process Inventory
Cost of Goods Manufactured*
8 Sampson Company
Income Statement
For the Month of January
Sales Revenue
Less: Cost of Goods Sold
Beginning Finished Goods Inventory
Plus: Cost of Goods Manufactured* (see schedule above)
Cost of Goods Available for Sale
Less: Ending Finished Goods Inventory
Unadjusted Cost of Goods Sold
Under-/Overapplied Overhead
Adjusted Cost of Goods Sold
Gross Profit
Less: Operating (Period) Expenses
Net Income from Operations
9 Sampson Company
Balance Sheet
As of January 31st
Assets Liabilities
Cash and Other Assets Payables and Other Liabilities
Raw Materials Inventory
Work in Process Inventory
Finished Goods Inventory Stockholders' Equity
Total Assets

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