Question

Part 1: Below is the company Information that you will use in completing Part 1. The requirements are listed after this company information and you should provide your solution below each of the requirements. 6. Completed jobs 25 and 27 in January. 7. Customer for Job 25 picked up completed job and was billed the following: Sheds, Inc. designs and builds sheds and outbuildings for individual customers. The company uses a job cost system and treats each customer's order as a separate job. At the beginning of January the company had the following raw material inventory: Job 25 10,000 $500 8. The company had the following period costs that they incurred: $2,000 $1,000 Sales commissions At the beginning of January the company had the following work-in-process inventories: $1,000 $3,000 Administrative salaries Job 21 Job 25 Required: You need to use cell references to complete Part 1 in your response and calculations. Also show written calculations separately for questions 1-10 below (EXCEL format only) During January, the following activities took place: 1. Develop the predetermined overhead rate. 1. Started jobs 26 and 27. 2. Complete the job cost sheets provided below for the month of January: 2. Purchased raw materials in January: $13,000 Job 21 Job 25 Job 26 Job 27 Requisitioned (or used) the following raw materials to the specific jobs: Beginning Balance $4,000 $1,000 $2,000 $3,000 3. Incurred January manufacturing payroll: Job 21 Job 25 Current costs: Job 26 Direct materials Job 27 Direct labor Applied Overhead Direct Labor $700 $2,000 $900 $1,600 Indirect labor $400 Job 21 Total Job 25 Job 26 Job 27 3. Determine the ending Work-In-Process Inventory at the end of January and provide the Job number(s) still in Work-in-Process at the end of January and determine total cost of ending work in process for January. 4. Incurred additional manufacturing overhead costs for January: $700 $500 4. Determine the Ending Finished Goods for January and provide the Job number(s) in Finished Goods at the Production equipment rent end of January and determine the total cost of ending finished goods for January. Manufacturing supplies purchased and used Factory utilities 5. Determine the Cost of Goods Sold for January and provide the Job number(s) in Cost of Goods Sold for $300 January and determine the total cost of goods sold for January. 5. Applied manufacturing overhead using a predetermined rate based on predicted annual overhead and predicted annual direct material cost as follows: 6. Determine the ending raw material balance for January, which you will need when preparing the Statement of Cost of Goods Manufacturing for the month ended. Predicted Annual Overhead $30,000 $150,000 Predicted Annual Direct Material cost

Answer 1

1	Predetermined overhead rate=Predicted annual overhead/Predicted annual direct material cost=30000/150000=$ 0.20 per direct material cost
2					Job 21	Job 25	Job 26	Job 27
	Beginning balance				1000	3000	0	0
	Current costs:
	Direct materials				4000	1000	2000	3000
	Direct labor				700	2000	900	1600
	Applied overhead				800	200	400	600
	(PDOH rate*Direct material)				(0.20*4000)	(0.20*1000)	(0.20*2000)	(0.20*3000)
	Total				6500	6200	3300	5200
3			Work in process inventory
						$
	Beginning balance			(1000+3000)		4000
	Add:
	Direct materials			(4000+1000+2000+3000)		10000
	Direct labor			(700+2000+900+1600)		5200
	Applied overhead			(800+200+400+600)		2000
						21200
	Less:Cost of jobs completed
	(Job 25 and Job 27)			(6200+5200)		11400
	Ending balance					9800
	Jobs still in work in process=Job 21 and Job 26
	Total cost of ending work in process for January=Total cost of Job 21 and 26=6500+3300=$ 9800
4			Finished goods inventory
						$
	Beginning balance					0
	Add: Cost of jobs completed					11400
						11400
	Less: Cost of Job sold (Job 25)					6200
	Ending balance					5200
	Job in the finished goods at the end of January=Job completed but not sold=Job 27
	Total cost of finished goods for January=Total cost of Job 27=$ 5200