YARRUM Manufacturing Company manufactures specialty, hand-crafted, 16 x 20 aluminum metal picture frame kits. The company has one production dept. In addition to the production dept, there are two service departments: electric & factory maintenance. A standard cost system is used by the company.

You have been hired to complete the cost accounting transactions for the month of January, 20XX. The following is the post-closing trail balance as of Dec 31 of the previous year:

POST CLOSING TRAIL BALANCE
DECEMBER 31, 20XX
Cash	132,130.00
A/R	81,700.00
Materials	30,753.00
Factory Supplies	1,830.00
Work in Process	51,600.00
Finished Goods	58,850.00
Prepaid Insurance	9,000.00
Factory Building	128,000
Accum. Deprec Factory Building		20,900.00
Machinery & Equipment	157,000.00
Accum. Deprec Machinery & Equipment		66,000.00
Office Equipment	21,000.00
Accum. Deprec Office Equipment		7,500.00
A/P		22,500.00
FICA Tax Payable		3,120.00
Employee Federal Income Tax Payable		5,200.00
Employee WI Income Tax Payable		1,600.00
State Unemployment Tax Payable		1,404.00
Federal Unemployment Tax Payable		364.00
Capital Stock common @ $7.50		150,000.00
Retained Earnings		393,275.00
	671,863.00	671,863.00

For the current fiscal year, factory overhead application rates are to be based upon the following data:

	Production Dept
Total Est. Annual F/OH:
Total Fixed Costs	108,000.00
Total Variable Costs	295,200.00
Total	403,200.00
Estimated Direct Labor Hours	36,000.00

The standard cost sheet for one picture frame, based on 6,000 frames per month, is as follows:

Materials
Polished aluminum frame stock, 6 @ $3 per foot	18.00
Museum acid free mounting board, 16 x 20	2.00
Standard framing mat, 16 x 20	5.00
Museum glass, 16 x 20	15.00	40.00
Labor: hours per frame, 12.50 per hour		6.25
F/OH:
Fixed hours @ $3 per hour	1.50
Variable hours @ $8.20 per hour	4.10	5.60
Total cost per frame		51.85

The company uses the FIFO method of accounting for all inventories. Materials are placed into production by the order of jobs started (based on the job number). Supplies are considered part of the factory overhead. Included in the supplies are the following framing materials: assembly hardware, spring clips, hanger hardware, and hanger wire.

Supporting information for the trial balance includes:

The balance of the materials account is as follows:

Materials	Units	Unit Cost	Total
Polished aluminum frame stock, 6 @ $3 per foot	570 pcs	$27.45 ea.	$15,646.50
Museum acid free mounting board, 16 x 20	640 boards	$2.10 ea.	1,344.00
Standard framing mat, 16 x 20	750 mats	$4.75 ea.	3,562.50
Museum glass, 16 x 20	680 pieces	$15.00 ea.	10,200.00
			$30,753.00

Enter the beginning balances1 as of January 11 in the inventory subsidiary ledger. The balance of the Work in Process account represents the following costs for job 15-2199, 80.2% complete. The contract for the job is 1,000 units. The job will be completed using the current year's standard costs.

Direct Materials	$39,600.00
Direct Labor	4,800.00
F/OH	7,200
	$51,600.00

Enter the beginning balances 1 as of January 11 in the job cost subsidiary ledger.

The balance of the Finished Goods account reflects the cost of job 15-2198, 1,000 frames, which were finished during December and awaiting delivery to the customer.

Listed below is a summary of the January transactions:

A. During the month, in addition to the job in Work in Process, three jobs were started: 16-0001, 16-0002, and 16-0003; units for each job are for 3,600, 2,160, and To, respectively.

Open job cost records for the three jobs.

B. Purchased the following materials and supplies on account (use only one materials control account) for the month:

	Units	Cost
Polished aluminum frame stock, 6 @ $3 per foot	3810	$102,527.10
Museum acid free mounting board, 16 x 20	6000	12,120.00
Standard framing mat, 16 x 20	5700	28,443.00
Museum glass, 16 x 20	5400	81,162.00
Miscellaneous Supplies		9,450.00

Record the entry for the purchase of the materials and supplies. Update the inventory records.

C. The following materials were issued into production:

	Job 15-2199	16-0001	16-0002	16-0003
Polished aluminum frame stock, 6 @ $3 per foot	198	3600	2163	90
Museum acid free mounting board, 16 x 20	198	3602	2163	90
Standard framing mat, 16 x 20	198	3602	2163	90
Museum glass, 16 x 20	198	3601	2160	90

Record the entry to place the materials into production (including material variances).

Update the job cost records.

Also, placed the following supplies into use.

Factory Supplies	Production	Electric	Factory Maintenance	Total
	$5,780.00	1,348.00	2,075.00	$9,203.00

Record the entry to place the factory supplies into use.

Update the Summary of Factory Overhead.

D. Factory wages and office, sales, and administrative salaries are paid at the end of each month. The following information has been provided from analysis of the labor time tickets and salary schedules. The FICA rate is 7.65%; federal income tax is 15%; Wisconsin income tax is 5%. The rates for the federal and state unemployment are .6% and 5.4%, respectively. No employee has reached the maximum for either the federal and state unemployment.

	Production Dept.
Job 15-2199	100 hrs @ $11.95
Job 16-0001	1,790 hrs @ $11.95
Job 16-0002	1,082 hrs @ $11.95
Job 16-0003	43 hrs @ $11.95

Wages for supervisors, custodial personnel, etc. $7,750.00 (see below for distribution); administrative and selling salaries were $22,500.00.

Indirect Labor	Production	Electric	Factory Maintenance	Total
	78.7%	8.1%	13.2%	$7,750.00

Calculate the payroll.

o Record and post the entry for the payroll liability.

o Record and post the entry for the employers tax liability.

o Record and post the entry to distribute the payroll (including labor variances).

o Record and post the entry to pay the payroll.

o Update the job cost records.

o Update the Summary of Factory Overhead for both the indirect labor and payroll taxes.

E. Miscellaneous factory overhead incurred during the month totaled $7, 160.00. Miscellaneous selling and administrative expenses were $1,500.00. These items as well as the FICA tax, federal income tax, state income tax, state unemployment, and federal unemployment for the quarter ended in December were paid.

Misc F/OH	Production	Electric	Factory Maintenance	Total
	$4,802.00	$627.00	$1,731.00	$7,160.00

Record and post the entry to pay above items. Update the Summary of Factory Overhead.

F. Annual depreciation on plant assets is calculated using the following rates:

Factory Buildings 10%

Machinery & Equipment 25%

Office Equipment 20%

Factory Depreciation	Production	Electric	Factory Maintenance	Total
	70%	10%	20%	100%

Record and post the entry for depreciation. Update the Summary of Factory Overhead.

G. The balance of the prepaid insurance represents a one-year premium for a fire insurance policy covering the factory building and machinery. It was paid the last day of October and became effective November 1.

Factory Insurance	Production	Electric	Factory Maintenance	Total
	70%	10%	20%	100%

Record and post the entry for the factory insurance. Update the Summary of Factory Overhead.

H. From the Summary of Factory Overhead, distribute the factory overhead to the factory departments. This entry would close out the Factory Overhead account and place the costs into the specific department overhead accounts.

Record and post the entry for distributing the factory overhead to the factory departments.

I. The total expenses of the factory maintenance department are distributed on the basis of floor space occupied based on the following:

Electric Department 9,600 sq ft

Production Department 30,400 sq ft

Allocating service departments sequentially prepare a Service Department Distribution Report.

Record and post the entry to distribute the service department costs into the service and producing department. Update the Summary of Factory Overhead.

J. Apply the factory overhead to the jobs.

Record and post the entry for the applied factory overhead. Update the job cost records.

K. Transfer balance of the under- and over-applied factory overhead to the overhead variance accounts.

Record and post the entry to close the production department overhead account into the variance accounts.

L. Transfer balances of the variance accounts into Cost of Goods Sold.

Record and post the entry to close the variance accounts into the Cost of Goods Sold

account to get the account balance to actual.

M. Received an order for 4,500 frames to be delivered in February.

Open a job cost record for job 16-0004.

N. Jobs 15-2199, 16-0001, and 16-0002 were completed during the month.

Record and post the journal entry to transfer the completed jobs. Update the job cost

records to indicate the jobs are completed.

O. During the month Jobs 15-2198 and 15-2199 were sold, on account, at $117.70 per frame.

Job 16-0002 was sold, on account, at a $106.50 each.

Record and post the journal entry for the sale of the jobs.

P. Received $399,440.00 from customers in payment of their accounts.

Record and post the journal entry for the receipt of payment.

Q. Paid monthly wages.

Record and post the journal entry to pay the payroll.

R. Paid $224,000.00 on account.

Record and post the journal entry to pay on the accounts payable.

S. Paid $139,000.00 miscellaneous selling and administrative expenses during the month.

Record and post the journal entry to pay the expenses.

T. At the end of the month complete the following:

Prepare a trial balance.

Based upon the monthly Production Report, complete a Cost of Production Summary.

PRODUCTION REPORT For Month Ending: January 31, 20XX
In process, beginning of period	1,000 units
Stage of completion	80.2%
Placed in process during period	7,560 units
Transferred to Finished Goods	6,760 units
In process, end of period	1,800 units
Stage of completion	5.0%

Prepare schedules, in good format, for the materials account, work in process, and finished goods accounts.

Prepare, in good format, the statement of cost of goods manufactured, income statement, and balance sheet for January 31.

Required: Complete the above transactions for January (General Journal, Schedules, Material Inventory Cards, Job Cost Sheets, Service Dept Distribution Worksheet, Summary of F/OH, Cost of Production Summary, Statement of Cost of Goods Manufactured, Income Statement, Balance Sheet)

NOTE: When completing all calculations, use the Round function in Excel, carrying all calculations to two decimal places.