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. This is a no nail, no screw, and no glue manufacturing ( no indirect materials used). You will be keeping track of the costs incurred to manufacture the tables using Job #1 Cost Sheet and Job #2 Cost Sheet.
	The cost of the direct materials that can be used to manufacture the table are as follows. These cost are on a per unit basis.
		Table Top	$1,100.00
		Table Leg	$200.00
		Drawer	$310.00
	The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours.
	The company estimates that there will be 12 direct labor hours worked during the month.
	The estimated manufacturing overhead cost for the month is:
	a.	Factory supervisor salary per month	$3,000.00
	b.	Rent for the factory per month	$600.00
	c.	Depreciation of factory equipment per month	$600.00
		Total Estimated manufacturing overhead	$4,200.00
	What is the predetermined manufacturing overhead rate?
Step 2	The first order you received was to manufacture a table using a table top and four legs. This is your Job #1.
Step 3	The customer that has ordered Job #2, wants a table that is the same as Job #1, but wants to also add a drawer to the table.
Step 4	The following is a list of transactions that need to be recorded for the company for activity in the month of December. Record those in the "General Journal" tab of the excel file using the proper format. Please use the following accounts: Accounts Receivables, Raw materials, Work in process, Finished goods, Accumulated depreciation, Accounts payable, Salaries and wages payable, Sales revenue, Manufacturing overhead, Cost of goods sold, Salaries and wages expense, Advertising expenses, and Depreciation expense.
1-Dec	Raw Materials purchased on account, $11,000.
5-Dec	All Raw Materials needed for Job #1 were requisitioned from the material storage for use during the month. Assume all materials are direct. (After you journalize this entry please enter the information into Job #1 Cost Sheet)
10-Dec	The following employee costs were incurred but not paid during the month:
	There are three assembly employees that spend 2 hours each, $25 per hour to make the table for Job #1. (After you journalize this entry please enter the information into Job #1 Cost Sheet)
Salary for supervisor of the factory $3,500.
Administrative Salary $2,000.
15-Dec	All Raw Materials needed for Job #2 were requisitioned from the material storage for use during the month. Assume all materials are direct. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
16-Dec	Rent for the month of December for the factory building incurred but not paid $600.
17-Dec	Advertising costs incurred but not paid for the month was $1,400.
20-Dec	Depreciation for the month of December was recorded on equipment was $750 ($150 for equipment used in the factory and the remainder for equipment used in selling and administrative activities).
22-Dec	Manufacturing overhead cost was applied based on direct labor hours to Job #1 based on the POHR determined on the "Job Cost Sheet". (After you journalize this entry please enter the information into Job #1 Cost Sheet)
26-Dec	Job #1 was completed and transferred to Finished Goods during the month.
28-Dec	The completed table from Job #1 was sold on account to the customer for $16,000 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.)
31-Dec	Direct labor cost incurred but not paid for three employees to start manufacturing Job #2. The employees only worked one hour each, three hours total, $25 per hour during the month and they did not complete their work on the job. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
31-Dec	Manufacturing overhead cost was applied based on direct labor hours to Job #2 based on the POHR. Only three direct labor hours were worked on Job #2 during the month. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
31-Dec	Any underapplied or overapplied overhead for the month was closed out to Cost of Goods Sold.
Step 5	Post the journal entries that you recorded on the "General Journal" tab to the "T-accounts" tab. This is the company's first month of business, so there will not be any beginning balances. Compute the balance for each T-account after all of the entries have been posted.
Step 6	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 your book (pg. 87). (Hint: This is the company's first month of operations and therefore the beginning balances will be zero.)
Step 7	Prepare an Income Statement for the month using the Traditional Format on the "Income Statement" tab.
Step 8	Answer the additional questions below
	Check Figure: Cost of Goods Manufactured= $4,150, Net operating income=$6,750
	What is the ending balance for raw materials?
	What is the ending balance for work in process?
	What is the ending balance for finished goods?
	What is the actual manufacturing overhead cost incurred during December before adjustment?
	What is the total applied manufacturing overhead cost during December before adjustment?
	What is the unadjusted cost of goods sold?
	Was the manufacturing overhead for the month of December overapplied/underapplied ?
	What is the amount of Manufacturing overhead overapplied/underapplied?
	What is the adjusted cost of goods sold?
	What is gross margin?
	What is the total prime cost for Job#1?
	What is the total conversion cost for job #1?
	What is the total product cost for job#1?
	What was the period cost incurred for the month of December?
	What is the total variable cost incurred for Job #1(assume that all selling and administrative cost and all manufacturing overhead costs are fixed.)?
	What is the contribution margin for Job #1 (assume that all selling and administrative cost and all manufacturing overhead costs are fixed.)?
	What would be the actual (not applied) total fixed manufacturing overhead cost incurred for the company for the month if the order in Job #1 is for five tables instead of one table assuming this cost is with in the relevant range?

Job Cost Sheet Job Number Date Initiated Item Date completed Direct Matarials Amount Direct Labor Hours Cost Summary Direct Materials Direct Labor Manufacturing Overhead Total Product Cost Unit Product Cost Rate Manufacturing Overhead Amount Hours Direct Materials: Manufacturing Overhead Rate Amount Materials: Job Cost Sheet Job Number Date Initiated Item Date completed Direct Matarials Amount Direct Labor Hours Cost Summary Direct Materials Direct Labor Manufacturing Overhead Total Product Cost Unit Product Cost Rate Manufacturing Ov Amount Hours Direct Materials: Manufacturing Overhead Rate Amount Date General Journal Description Debit Credit Account Receivables Accounts Payable Raw Materials Salaries and Wages Payable Work In Process Finished Goods Manufacturing Overhead Accumulated Depreciation yable Sales Revenue es Payable Cost of Goods Sold Salaries and Wages Expense Advertising Expense Depreciation Expense Thunderduck Custom Tables, Inc. Schedule of cost of goods manufactured For the month Ended December 31, 20XX Thunderduck Custom Tables, Inc. Cost of goods sold For the month Ended December 31, 20XX Custom Tables, Inc. of goods sold ded December 31, 20XX Thunderduck Custom Tables, Inc. Income Statement For the month Ended December 31, 20XX Step 1: Calculation of predetermined overhead rate is as under: Predetermined overhead rate = Total Budgeted overhead/ Total no. of Budgeted Base hours = $4200/12 = $350 per labor hour. Job Cost Sheet Job Number 1 Date Initiated Item Date completed Direct Matarials Direct Labor Amount $ Hours 1,100 Manufacturing Overhead Rate 6 Amount 25 800 Cost Summary Direct Materials $ 1,900.00 Direct Labor $ 150.00 Manufacturing Overhead $2,100.00 Total Product Cost $ 4,150.00 Unit Product Cost $ 4,150.00 150 Hours 6 Direct Materials: Manufacturing Overhead Rate 350.00 Amount $2,100.00 Materials: Job Cost Sheet Job Number 2 Date Initiated Item Date completed Direct Matarials Direct Labor Amount $ Hours 1,100 Rate 9 Amount 25 800 300 Cost Summary Direct Materials $ 2,200.00 Direct Labor $ 225.00 Manufacturing Overhead Manufacturing Ov $3,150.00 Total Product Cost $ 5,575.00 Unit Product Cost $ 5,575.00 Hours 225 9 Direct Materials: Manufacturing Overhead Rate Amount $350.00 $3,150.00 Date General Journal Description 1-Dec Raw Materials Accounts Payables 5-Dec WIP- Job 1 Raw Materials 10-Dec WIP - Job 1--Wages Salaries & Wages payable Mfg. OH -Salary-Supervisor Salaries & Wages payable 15-Dec WIP - Job 2 Raw Materials 16-Dec Mfg. OH--Dec. Rent Accounts Payables 17-Dec Advertising Expense Cash 20-Dec Mfg. OH(Depn. FactoryEqpt) Depn.-(Sell.& admn. Eqpt.) Acc.Depn Debit 11000 11000 1900 1900 150 150 5500 5500 2210 2210 600 600 1400 1400 150 600 750 22-Dec WIP- Job 1--3*2*350 Mfg. OH 2100 26-Dec Finished goods WIP- Job 1 4150 28-Dec Account Receivable Sales Revenue COGS Finished goods 31-Dec WIP - Job 2--Wages 3*1*25 Salaries & Wages payable Credit 2100 4150 16000 16000 4150 4150 75 75 7250 WIP- Job 2 ---350*3*1 Mfg. OH 1050 COGS Mfg.OH (under applied) (5500+600+150-2100-1050) 3100 1050 3100 Account Receivables 28-Dec 15000 $ 15,000 31-Dec Raw Materials 11000 1900 2210 $ 6,890 5-Dec 15-Dec 31-Dec 1-Dec 5-Dec 10-Dec 15-Dec 22-Dec 31-Dec 31-Dec Work In Process 1900 4150 150 $ 3,335 2210 2100 75 1050 26-Dec Finished Goods 4150 4150 Manufacturing Overhead 10-Dec $ 2100 5,500 16-Dec 600 $ 1,050 20-Dec $ 3100 150 $ - Accumulated Depreciation 26-Dec 31-Dec 28-Dec 22-Dec 31-Dec 31-Dec 31-Dec Accounts Payable 31-Dec $ 11,600 11000 600 Salaries and Wages Payable 31-Dec $ 150 5,725 $ 5,500 75 31-Dec $ 750 $ 750 20-Dec yable 1-Dec 16-Dec Sales Revenue 31-Dec $ 15,000 15000 28-Dec es Payable 10-Dec 10-Dec 31-Dec Cost of Goods Sold 28-Dec 4150 $ 7,250 31-Dec $ 3,100 31-Dec Salaries and Wages Expense 31-Dec $ 1200 10-Dec 1,200 Advertising Expense 17-Dec 1400 $ 1,400 31-Dec Depreciation Expense 20-Dec 600 $ 600 31-Dec Thunderduck Custom Tables, Inc. Schedule of cost of goods manufactured For the month Ended December 31, 20XX Thunderduck Custom Tables, Inc. Cost of goods sold For the month Ended December 31, 20XX Beginning Finished goods Direct Materials used: Beginning Raw Materials 0 0 Add:COGM 4150 Add: Cost of Raw materials purchased 11000 Mfg. OH underappli ed 3100 Total Raw materials available 11000 Cog available for sale 7250 Less: Ending Raw materials Total Raw materials used Direct Labor 6890 4110 225 Manufacturing OH applied 3150 Total Mfg. costs 7485 Add: Beg. WIP Inventory Less: Ending WIP Inventory(2210+75+105 0) COGM 0 3335 4150 Less: Ending Finished goods COGS 0 7250 Custom Tables, Inc. of goods sold ded December 31, 20XX Thunderduck Custom Tables, Inc. Income Statement For the month Ended December 31, 20XX Sales Less: 15000 7250 COGS Net profit: 7750 Ending balance of raw materials 6890 Ending balance of WIP Inventory 3335 Ending balance of Finished goods 0 Actual Mfg. OH cost incurred during December(5 500+600+1 50) 6250 Total applied Mfg.OH for Dec 3150 Unadjusted COGS Under applied COGS Gross Margin 4150 3100 7250 8750 Net Operating Income Gross Margin(1600 0-7250) Less: Advertising Expense Depn.(Sell.& admn. Eqpt.) Net Operating Income 8750 1400 600 6750 Prime Cost for Job 1 Direct Materials (1100+(4*2 00)) Direct Labor 3*2*25= Total Prime cost 1900 150 2050 Conversion cost for Job 1 Applied Mfg. OH 3*2*350= Total Product cost for Job 1 (2050+2100 ) Period costs for Dec Mfg. OH -SalarySupervisor Mfg. OH-Dec. Rent 2100 4150 5500 600 Mfg. OH(Depn. FactoryEqpt) Depn.(Sell.& admn. Eqpt.) Total Period costs Contribution Margin Job 1 =(SalesVariable costs)=(160 00-2050) Increase in Mfg. Costs= (1900+150) *5 = 150 600 6850 13950 10250 Fixed Mfg. OH costs Mfg. OH -SalarySupervisor 5500 Mfg. OH-Dec. Rent 600 Mfg. OH(Depn. FactoryEqpt) 150 Total fixed Mfg. OH 6250