Question
The company is now beginning to realize their long-term dream: selling costuming. Johnny believes that every artist is unique and would like to track the
The company is now beginning to realize their long-term dream: selling costuming. Johnny believes that every artist is unique and would like to track the companys inventory using a job costing technique. Moira, on the other hand, believes that all the worlds a stage and that a process costing technique should work fine. Theyve come to you for help. Theyd like to know what their inventory accounts and cost of goods sold would look like under each method. Theyve done their best to compile all of the cost information they believe youll need; however, as they are not accountants, it may not be organized ideally. You pick up their file and see the following information:
Beginning of the year estimates: | |||||
Direct Materials Cotton | $210,000
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| WIP Units: | 6,800 |
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Direct Materials Lace | $350,000 |
| BOY WIP Value: | $42,860 |
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Direct Labor | $350,000 |
| WIP Status: | ||
MOH: | $170,000 |
| Input | Completion | Value |
Machine Hours: | 20,500 |
| Direct Material Cotton | 30% Complete | $11,000 |
Direct Labor Hours | 80,000 |
| Direct Material - Lace | 25% Complete | $20,980 |
Cost Allocation Base | Machine Hours |
| Conversion Costs | 45% Complete | $10,880 |
End of the year Actuals: | |||||
Direct Materials Cotton | $200,000
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| WIP Units: | 4,420 |
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Direct Materials Lace | $180,000 |
| WIP Value: | ??? |
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Direct Labor | $320,000 |
| WIP Status: | ||
MOH: | $164,000 |
| Input | Completion | Value |
Machine Hours: | 21,242 |
| Direct Material Cotton | 65% Complete | ??? |
Direct Labor Hours | 79,870 |
| Direct Material - Lace | 80% Complete | ??? |
Completed Units | 18,900 |
| Conversion Costs | 90% Complete | ??? |
Direct Material Purchases (total) | $425,000 |
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MOH Bills: | |||||
Electric Payable | $42,000 |
| Rent Payable | $36,000 |
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Depreciation | $21,000 |
| Indirect Materials | $12,000 |
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Indirect Labor | $14,000 |
| Taxes Payable | $39,000 |
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Beginning of the year account balances | |||||
Direct Materials total | $50,000 |
| WIP | $82,000 |
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Finished Goods | $17,000 |
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REQUIREMENTS:
- Calculate the value of the End of Year WIP and Finished Goods using Johnnys preferred job-costing technique.
- Journalize all necessary journal entries for this job-costing technique in the job-costing tab of the project template. Johnny prefers any over/under-allocation be closed to COGS.
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