Managerial Accounting - Quiz 1

High-Low – Hidden Hills

Manufacturing Statement – Garcia VineyardsGarcia vineyards, a large winery in Texas, produce a full line of varietal wines. The company, whose fiscal year begins on November 1, has just completed a record-breaking year. Its inventory account balances on October 31 of this year were Materials Inventory, $1,803,800; Work in Process Inventory, $2,764,500; and Finished Goods Inventory, $1,883,200. At the beginning of the year, the inventory account balances were Materials Inventory, $2,156,200; Work in Process Inventory, $3,371,000; and Finished Goods Inventory, $1,596,400.

During the fiscal year, the company’s purchases of direct materials totaled $6,750,000. Direct labor hours totaled 142,500, and the average labor rate was $8.20 per hour. The following overhead costs were incurred during the year: depreciation–plant and equipment, $685,600; depreciation of office furniture $203,000; indirect labor, $207,300; property tax, plant and equipment, $94,200; plant maintenance, $83,700; small tools for factory,$42,400; factory utilities, $96,500; and salary of office staff, $76,100.Commission expense $24,000.

Prepare a statement of cost of goods manufactured for the fiscal year ended October 31.

Manufacturing Statement – Piedmont Corporation

Manufacturing Statement – Randa Company

Job Order Costing – Pak Co’s

Job Order Costing – Cimino Company

Job Order Costing – Landsman Company

Required:1. Calculate the predetermined overhead rate based on direct labor cost.(Hint: POHR remains constant

throughout the year).2. Calculate the ending balance for each job as of June 30.3. Calculate the ending balance in Work-in-Process Inventory as of June 30.4. Calculate the cost of goods sold for June.5. Assuming that Landsman prices its jobs at cost plus 50 percent, calculate Landsman’s sales revenue for

June.

Job Order Costing – Winfrey Company

Job Order Costing – Garcia ManufacturingGarcia Manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2010, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account.During the month of January, Garcia Manufacturing began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month

1. Purchased additional raw materials of $90,000 on account.2. Incurred factory labor costs of $65,000. 3. Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $15,000;

depreciation expense $19,000, and various other manufacturing overhead costs on account $20,000.4. Assigned direct materials and direct labor to jobs as follows.

Job No. Direct Materials Direct Labor50 $10,000 $ 5,00051 39,000 25,00052 30,000 20,000

Required(a) Calculate the predetermined overhead rate for 2010, assuming Garcia Manufacturing estimates total

manufacturing overhead costs of $1,050,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year.

(b) Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.

(c) Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a).

(d) Prepare the journal entry (or entries) to record the completion of any job(s) during the month.(e) Prepare the journal entry (or entries) to record the sale of any job(s) during the month.(f) What is the balance in the Finished Goods Inventory account at the end of the month?(g) What is the amount of over- or underapplied overhead?

Job Order Costing - Stockman Co.