Street Cred, Inc. is a clothing design house that has just installed an activity based costing dimension into their job costing accounting system. On January 1, the company had the following inventory balances: S 600 ASSETS Cash Raw Materials Supplies Work in Process Finished Goods LIABILITIES $1,200 Accounts Payable 350 100 800 STOCKHOLDERS EQUITY 400 Common Stock Retained Earnings $2,850 Total 1,000 1,250 $2,850 Total In work-in-process Job 10 has direct materials is $100, direct labor is $300, and overhead $400. In finished goods, there is one product unsold from last year. Note that Supplies are kept separate from Raw Materials and are accounted for as Manufacturing Overhead when consumed. Street Cred, Inc. has identified four activity centers. The activity centers are listed below, along with the estimated overhead costs and expected level of activity in each center for the coming year. Activity Center Cost Driver Estimated Cost Expected Activity Assembling Number of units $ 600 20 units Material moved to WIP Number of moves $ 400 40 moves Parts Administration Number of part types $ 330 15 part types Training Number of trainees $ 550 50 trainees During the year Jobs 11, 12, and 13 were started. The following transactions were recorded during the year: a. Raw materials and supplies were purchased on account, S1,200 and $250, respectively. b. Raw materials were requisitioned for use in production, direct (Job 10. S250. Job 11. $400, Job 12, $300, JOD 13, $500). In addition, supplies (Assembling, $100, Material Moves, $50, Parts Administration $75) were used. c. The following costs were incurred (but not yet paid) for employee services: direct (Job 10, S150, Job 11, S180, Job 12 $250, Job 13, $300), indirect labor (Assembling, $180, Parts Administration, $50, Training, $250). d. Administrative expenses were paid in cash, $900. e. Miscellaneous overhead costs were paid on account, (Assembling, $110, Material Moves $90, Parts Administration, $245, Training $125) f. Manufacturing overhead cost was applied to production. Actual activity for the various activity centers during the year are as follows: Job 10 Job 11 Job 12 Job 13 Assembling 5 units 4 units 3 units 2 units Material moved to WIP 4 moves 3 moves 2 moves I moves Parts Administration 5 part types 8 part types 2 part types 4 part types Training 8 trainees 4 trainees 12 trainees 6 trainees g. Jobs 10, 13 were completed. h. Job 13 was sold for $3,000 on account. i. The product that was the beginning balance of finished goods was sold for cash, S600. REQUIRED: 1. Prepare the job cost sheets for Jobs 10, 11, 12, and 13. 2. Compute the activity cost rate for each activity. 3. Prepare all journal entries and record in T-accounts for the information above. 4. Prepare the cost of goods manufactured statement. 5. Determine the over/under applied balance for each of the four activities. Close the net activity balance to Cost of Goods Sold. Show your calculations. 6. Prepare a cost of goods sold statement. 7. Prepare an income statement for the year's operations. 8. Prepare a statement of retained earnings. 9. Prepare an ending balance sheet for Street Cred, Inc. Street Cred, Inc. is a clothing design house that has just installed an activity based costing dimension into their job costing accounting system. On January 1, the company had the following inventory balances: S 600 ASSETS Cash Raw Materials Supplies Work in Process Finished Goods LIABILITIES $1,200 Accounts Payable 350 100 800 STOCKHOLDERS EQUITY 400 Common Stock Retained Earnings $2,850 Total 1,000 1,250 $2,850 Total In work-in-process Job 10 has direct materials is $100, direct labor is $300, and overhead $400. In finished goods, there is one product unsold from last year. Note that Supplies are kept separate from Raw Materials and are accounted for as Manufacturing Overhead when consumed. Street Cred, Inc. has identified four activity centers. The activity centers are listed below, along with the estimated overhead costs and expected level of activity in each center for the coming year. Activity Center Cost Driver Estimated Cost Expected Activity Assembling Number of units $ 600 20 units Material moved to WIP Number of moves $ 400 40 moves Parts Administration Number of part types $ 330 15 part types Training Number of trainees $ 550 50 trainees During the year Jobs 11, 12, and 13 were started. The following transactions were recorded during the year: a. Raw materials and supplies were purchased on account, S1,200 and $250, respectively. b. Raw materials were requisitioned for use in production, direct (Job 10. S250. Job 11. $400, Job 12, $300, JOD 13, $500). In addition, supplies (Assembling, $100, Material Moves, $50, Parts Administration $75) were used. c. The following costs were incurred (but not yet paid) for employee services: direct (Job 10, S150, Job 11, S180, Job 12 $250, Job 13, $300), indirect labor (Assembling, $180, Parts Administration, $50, Training, $250). d. Administrative expenses were paid in cash, $900. e. Miscellaneous overhead costs were paid on account, (Assembling, $110, Material Moves $90, Parts Administration, $245, Training $125) f. Manufacturing overhead cost was applied to production. Actual activity for the various activity centers during the year are as follows: Job 10 Job 11 Job 12 Job 13 Assembling 5 units 4 units 3 units 2 units Material moved to WIP 4 moves 3 moves 2 moves I moves Parts Administration 5 part types 8 part types 2 part types 4 part types Training 8 trainees 4 trainees 12 trainees 6 trainees g. Jobs 10, 13 were completed. h. Job 13 was sold for $3,000 on account. i. The product that was the beginning balance of finished goods was sold for cash, S600. REQUIRED: 1. Prepare the job cost sheets for Jobs 10, 11, 12, and 13. 2. Compute the activity cost rate for each activity. 3. Prepare all journal entries and record in T-accounts for the information above. 4. Prepare the cost of goods manufactured statement. 5. Determine the over/under applied balance for each of the four activities. Close the net activity balance to Cost of Goods Sold. Show your calculations. 6. Prepare a cost of goods sold statement. 7. Prepare an income statement for the year's operations. 8. Prepare a statement of retained earnings. 9. Prepare an ending balance sheet for Street Cred, Inc