ACCT 212 ACCT_212_Chapter_2_Homework Liberty University

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Liberty University ACCT 212 Chapter 2 Homework

Just change the values given. It will automatically change the answe
Question 1
As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custo

Job 102 Job 103 Job 104
Direct materials 22000 71000 59000
Direct labor 17000 27000 43000
Overhead applied 6800 10800 17200


Job 102 was started in production in May, and the following costs were assigned to it in May: direct materials,
10000 4000 1600

1&2. Complete the table below to calculate the cost of the raw materials requisitioned and direct labor cost incurred durin
3. Using the accumulated costs of the jobs, what predetermined overhead rate is used?
4. How much total cost is transferred to finished goods during June?

Direct Materials:
Job May June Total
102 10000 12000 22000
103 0 71000 71000
104 0 59000 59000
Total 10000 142000 152000
Direct Labor:
Job May June Total
102 4000 13000 17000
103 0 27000 27000
104 0 43000 43000
Total 4000 83000 87000

Overhead Rate
Choose Numerator: / Choose Denominator: = Overhead Rate
Job 102
Estimated overhead costs
/ Estimated direct labor = Overhead rate
6800 / 17000 = 40.0%
Job 103
Estimated overhead applied
/ Estimated direct labor = Overhead rate
10800 / 27000 = 40.0%
Job 104
Estimated overhead costs
/ Estimated direct labor = Overhead rate
17200 / 43000 = 40.0%

, Cost
Transferred
Direct Applied to Finished
Job Materials Direct Labor Overhead Total Cost Goods
102 $ 22,000 $ 17,000 6800 $ 45,800 $ 45,800
103 71,000 27,000 10800 $ 108,800 $ 108,800
104 59,000 43,000 17200 $ 119,200 0
Total $ 152,000 $ 87,000 34800 $ 273,800 $ 154,600

Question 2
Starr Company reports the following information for August.
Raw materials purchased
$77,400
on account
Direct materials used$56,600
in production
Factory wages earned $21,350
(direct labor)
Overhead rate 135 % of direct labor cost

Prepare journal entries to record the following events.
1. Raw materials purchased.
2. Direct materials used in production.
3. Direct labor used in production.
4. Applied overhead.

Transaction General Journal Debit Credit
1 Raw materials inventory
$77,400
Accounts payable $77,400

2 Work in process inventory
$56,600
Raw materials inventory $56,600

3 Work in process inventory
$21,350
Factory wages payable $21,350

4 Work in process inventory
28823
Factory overhead 28823

Question 3
Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of
6300 3000 2700 90% 28500

July Product Costs
Job 120 Job 121 Job 122 Total
Direct materials 2900 7500 4100 14500
Direct labor 3900 3700 2200 9800
Overhead applied

1. Prepare journal entries for the following in July.
a. Direct materials used in production.
b. Direct labor used in production.

, c. Overhead applied.
d. The sale of Job 120.
e. Cost of goods sold for Job 120.

2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (Assume the

Transaction General Journal Debit Credit
a. Work in process inventory
14500
Raw materials inventory 14500

b. Work in process inventory9800
Factory wages payable 9800

c. Work in process inventory8820
Factory overhead 8820

d. Accounts receivable 28500
Sales 28500

e. Cost of goods sold 22310
Finished goods inventory 22310

Work in ProcessFinished Goods
Job # Job 122 Job 121
Direct materials 4100 7500
Direct labor 2200 3700
Overhead 1980 3330
Total cost 8280 14530

Question 4
Prepare summary journal entries to record the following transactions for a company in its first month of operations.
a. Raw materials purchased on account, $102,000.
102000
b. Direct materials used in production, $42,500. Indirect materials used in production, $15,000.
42500 15000
c. Paid cash for factory payroll, $55,000. Of this total, $37,000 is for direct labor and $18,000 is for indirect lab
55000 37000 18000
d. Paid cash for other actual overhead costs, $8,375.
8375
e. Applied overhead at the rate of 125% of direct labor cost.
125%
f. Transferred cost of jobs completed to finished goods, $72,600.
72600
g1 Jobs that had a cost of $85,600 were sold.
85600
g2. Sold jobs on account for $123,000.
123000

, Transaction General Journal Debit Credit
a. Raw materials inventory
102000
Accounts payable 102000

b(1). Work in process inventory
42500
Raw materials inventory 42500

b(2). Factory overhead 15000
Raw materials inventory 15000

c. Work in process inventory
37000
Factory overhead 18000
Cash 55000

d. Factory overhead 8375
Cash 8375

e. Work in process inventory
46250
Factory overhead 46250

f. Finished goods inventory
72600
Work in process inventory 72600

g(1). Cost of goods sold 85600
Finished goods inventory 85600

g(2). Accounts receivable 123000
Sales 123000

Question 5
The following information is available for Lock-Tite Company, which produces special-order security products and uses a jo

April 30 May 31
Inventories
Raw materials$ 44,000 $ 52,000
Work in process 9,800 20,600
Finished goods 54,000 33,200
Activities and information for May
Raw materials purchases (paid with195,000
cash)
Factory payroll (paid with cash) 250,000
Factory overhead
Indirect materials 7,000
Indirect labor 57,500
Other overhead costs 112,500
Sales (received in cash) 1,000,000
Predetermined overhead rate based on55% direct labor cost