Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May: Materials May 1 Balance 28,600 May 31 Requisitions (a) 31 Purchases 114,800 Work in Process May 1 Balance (b) 31 Completed jobs (f) 31 Materials (c) 31 Direct labor (d) 31 Factory overhead applied (e) Finished Goods May 1 Balance 0 May 31 Cost of goods sold (g) 31 Completed jobs (f) Wages Payable May 31 Wages incurred 118,800 Factory Overhead May 1 Balance 21,700 May 31 Factory overhead applied (e) 31 Indirect labor (h) 31 Indirect materials 15,300 31 Other overhead 104,700 In addition, the following information is available: Materials and direct labor were applied to the following jobs in May: Job No. Style Quantity Direct Materials Direct Labor 101 AF1 190 $18,540 $14,000 102 AF3 410 32,190 26,000 103 AF2 180 11,880 7,000 104 VY1 290 33,150 28,000 105 VY2 160 16,620 15,000 106 AF4 150 9,750 5,000 Total 1,380 $122,130 $95,000 Factory overhead is applied to each job at a rate of 170% of direct labor cost. The May 1 Work in Process balance consisted of two jobs, as follows: Job No. Style Work in Process, May 1 101 AF1 $5,600 102 AF3 16,100 Total $21,700 Customer jobs completed and units sold in May were as follows: Job No. Style Completed in May Units Sold in May 101 AF1 X 152 102 AF3 X 328 103 AF2 0 104 VY1 X 244 105 VY2 X 133 106 AF4 0 Required: 1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers. Job No. Quantity May 1 Work in Process Direct Materials Direct Labor Factory Overhead Total Cost Unit Cost Units Sold Cost of Goods Sold No. 101 $ 5,600 $ 18,540 $ 14,000 $ $ $ $ No. 102 16,100 32,190 26,000 No. 103 11,880 7,000 No. 104 33,150 28,000 No. 105 16,620 15,000 No. 106 9,750 5,000 Total $21,700 $122,130 $95,000 $ $ $ a. Materials Requisitions $ b. Work in Process Beginning Balance $ c. Direct Materials $ d. Direct Labor $ e. Factory overhead applied $ f. Completed jobs $ g. Cost of goods sold $ h. Indirect labor $ 2. Determine the May 31 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances. Materials $ Work in Process $ Finished Goods $ Factory Overhead $
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Analyzing
Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May:
| Materials | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 28,600 | May 31 | Requisitions | (a) |
| 31 | Purchases | 114,800 |
| Work in Process | |||||
|---|---|---|---|---|---|
| May 1 | Balance | (b) | 31 | Completed jobs | (f) |
| 31 | Materials | (c) | |||
| 31 | Direct labor | (d) | |||
| 31 | Factory |
(e) |
| Finished Goods | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 0 | May 31 | Cost of goods sold | (g) |
| 31 | Completed jobs | (f) |
| Wages Payable | |||||
|---|---|---|---|---|---|
| May 31 | Wages incurred | 118,800 | |||
| Factory Overhead | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 21,700 | May 31 | Factory overhead applied | (e) |
| 31 | Indirect labor | (h) | |||
| 31 | Indirect materials | 15,300 | |||
| 31 | Other overhead | 104,700 |
In addition, the following information is available:
- Materials and direct labor were applied to the following jobs in May:
Job No. Style Quantity Direct Materials Direct Labor 101 AF1 190 $18,540 $14,000 102 AF3 410 32,190 26,000 103 AF2 180 11,880 7,000 104 VY1 290 33,150 28,000 105 VY2 160 16,620 15,000 106 AF4 150 9,750 5,000 Total 1,380 $122,130 $95,000 - Factory overhead is applied to each job at a rate of 170% of direct labor cost.
- The May 1 Work in Process balance consisted of two jobs, as follows:
Job No. Style Work in Process,
May 1101 AF1 $5,600 102 AF3 16,100 Total $21,700 - Customer jobs completed and units sold in May were as follows:
Job No. Style Completed in
MayUnits Sold
in May101 AF1 X 152 102 AF3 X 328 103 AF2 0 104 VY1 X 244 105 VY2 X 133 106 AF4 0
Required:
1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers.
| Job No. | Quantity | May 1 Work in Process |
Direct Materials |
Direct Labor |
Factory Overhead |
Total Cost | Unit Cost | Units Sold | Cost of Goods Sold | ||||||||
| No. 101 | $ 5,600 | $ 18,540 | $ 14,000 | $ | $ | $ | $ | ||||||||||
| No. 102 | 16,100 | 32,190 | 26,000 | ||||||||||||||
| No. 103 | 11,880 | 7,000 | |||||||||||||||
| No. 104 | 33,150 | 28,000 | |||||||||||||||
| No. 105 | 16,620 | 15,000 | |||||||||||||||
| No. 106 | 9,750 | 5,000 | |||||||||||||||
| Total | $21,700 | $122,130 | $95,000 | $ | $ | $ |
a. Materials Requisitions $
b. Work in Process Beginning Balance $
c. Direct Materials $
d. Direct Labor $
e. Factory overhead applied $
f. Completed jobs $
g. Cost of goods sold $
h. Indirect labor $
2. Determine the May 31 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.
| Materials | $ |
| Work in Process | $ |
| Finished Goods | $ |
| Factory Overhead | $ |
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