Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for June: Materials June 1 Balance 35,400 June 30 Requisitions (A) June 30 Purchases 142,200 Work in Process June 1 Balance (B) June 30 Completed jobs (F) June 30 Materials (C) June 30 Direct labor (D) June 30 Factory overhead applied (E) Finished Goods June 1 Balance 0 June 30 Cost of goods sold (G) June 30 Completed jobs (F) Wages Payable June 30 Wages incurred 122,500 Factory Overhead June 1 Balance 21,500 June 30 Factory overhead applied (E) June 30 Indirect labor (H) June 30 Indirect materials 18,900 June 30 Other overhead 75,200 In addition, the following information is available: a. Materials and direct labor were applied to six jobs in July: Job No. Style Quantity Direct Materials Direct Labor 201 T100 190 $23,120 $14,000 202 T200 390 38,310 26,000 203 T400 200 14,000 8,000 204 S200 290 43,790 29,000 205 T300 190 26,080 17,000 206 S100 120 6,000 4,000 Total 1,380 $151,300 $98,000 b. Factory overhead is applied to each job at a rate of 140% of direct labor cost. c. The June 1 Work in Process balance consisted of two jobs, as follows: Job No. Style Work in Process, June 1 201 T100 $5,600 202 T200 15,900 Total $21,500 d. Customer jobs completed and units sold in July were as follows: Job No. Style Completed in July Units Sold in July 201 T100 X 152 202 T200 X 312 203 T400 0 204 S200 X 244 205 T300 X 158 206 S100 0 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 June 1 Work in Process Direct Materials Direct Labor Factory Overhead Total Cost Unit Cost Units Sold Cost of Goods Sold No. 201 $ 5,600 $ 23,120 $ 14,000 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 fill in the blank 5 $fill in the blank 6 No. 202 15,900 38,310 26,000 fill in the blank 8 fill in the blank 9 fill in the blank 10 fill in the blank 11 fill in the blank 12 No. 203 14,000 8,000 fill in the blank 14 fill in the blank 15 fill in the blank 16 fill in the blank 17 No. 204 43,790 29,000 fill in the blank 19 fill in the blank 20 fill in the blank 21 fill in the blank 22 fill in the blank 23 No. 205 26,080 17,000 fill in the blank 25 fill in the blank 26 fill in the blank 27 fill in the blank 28 fill in the blank 29 No. 206 6,000 4,000 fill in the blank 31 fill in the blank 32 fill in the blank 33 fill in the blank 34 Total $21,500 151,300 98,000 $fill in the blank 36 $fill in the blank 37 $fill in the blank 38 a. Materials Requisitions $fill in the blan b. Work in Process Beginning Balance $fill in the blank c. Direct Materials $fill in the blank d. Direct Labor $fill in the blank e. Factory overhead applied $fill in the blank f. Completed jobs $fill in the blank g. Cost of goods sold $fill in the blank h. Indirect labor $fill in the blank 2. Determine the June 30 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances. Materials: $fill in the blank Work in Process: $fill in the blank Finished Goods: $fill in the blank Factory Overhead: $fill in the blank
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
Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for June:
| Materials | |||||
|---|---|---|---|---|---|
| June 1 | Balance | 35,400 | June 30 | Requisitions | (A) |
| June 30 | Purchases | 142,200 |
| Work in Process | |||||
|---|---|---|---|---|---|
| June 1 | Balance | (B) | June 30 | Completed jobs | (F) |
| June 30 | Materials | (C) | |||
| June 30 | Direct labor | (D) | |||
| June 30 | Factory |
(E) |
| Finished Goods | |||||
|---|---|---|---|---|---|
| June 1 | Balance | 0 | June 30 | Cost of goods sold | (G) |
| June 30 | Completed jobs | (F) |
| Wages Payable | |||||
|---|---|---|---|---|---|
| June 30 | Wages incurred | 122,500 | |||
| Factory Overhead | |||||
|---|---|---|---|---|---|
| June 1 | Balance | 21,500 | June 30 | Factory overhead applied | (E) |
| June 30 | Indirect labor | (H) | |||
| June 30 | Indirect materials | 18,900 | |||
| June 30 | Other overhead | 75,200 |
In addition, the following information is available:
a. Materials and direct labor were applied to six jobs in July:
| Job No. | Style | Quantity | Direct Materials | Direct Labor | ||||||||
| 201 | T100 | 190 | $23,120 | $14,000 | ||||||||
| 202 | T200 | 390 | 38,310 | 26,000 | ||||||||
| 203 | T400 | 200 | 14,000 | 8,000 | ||||||||
| 204 | S200 | 290 | 43,790 | 29,000 | ||||||||
| 205 | T300 | 190 | 26,080 | 17,000 | ||||||||
| 206 | S100 | 120 | 6,000 | 4,000 | ||||||||
| Total | 1,380 | $151,300 | $98,000 |
b. Factory overhead is applied to each job at a rate of 140% of direct labor cost.
c. The June 1 Work in Process balance consisted of two jobs, as follows:
| Job No. | Style | Work in Process, June 1 | |||
| 201 | T100 | $5,600 | |||
| 202 | T200 | 15,900 | |||
| Total | $21,500 |
d. Customer jobs completed and units sold in July were as follows:
| Job No. | Style | Completed in July | Units Sold in July | |
| 201 | T100 | X | 152 | |
| 202 | T200 | X | 312 | |
| 203 | T400 | 0 | ||
| 204 | S200 | X | 244 | |
| 205 | T300 | X | 158 | |
| 206 | S100 | 0 |
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 | June 1 Work in Process |
Direct Materials |
Direct Labor |
Factory Overhead |
Total Cost | Unit Cost | Units Sold | Cost of Goods Sold | ||||||||
| No. 201 | $ 5,600 | $ 23,120 | $ 14,000 | $fill in the blank 2 | $fill in the blank 3 | $fill in the blank 4 | fill in the blank 5 | $fill in the blank 6 | |||||||||
| No. 202 | 15,900 | 38,310 | 26,000 | fill in the blank 8 | fill in the blank 9 | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 | |||||||||
| No. 203 | 14,000 | 8,000 | fill in the blank 14 | fill in the blank 15 | fill in the blank 16 | fill in the blank 17 | |||||||||||
| No. 204 | 43,790 | 29,000 | fill in the blank 19 | fill in the blank 20 | fill in the blank 21 | fill in the blank 22 | fill in the blank 23 | ||||||||||
| No. 205 | 26,080 | 17,000 | fill in the blank 25 | fill in the blank 26 | fill in the blank 27 | fill in the blank 28 | fill in the blank 29 | ||||||||||
| No. 206 | 6,000 | 4,000 | fill in the blank 31 | fill in the blank 32 | fill in the blank 33 | fill in the blank 34 | |||||||||||
| Total | $21,500 | 151,300 | 98,000 | $fill in the blank 36 | $fill in the blank 37 | $fill in the blank 38 |
a. Materials Requisitions $fill in the blan
b. Work in Process Beginning Balance $fill in the blank
c. Direct Materials $fill in the blank
d. Direct Labor $fill in the blank
e. Factory overhead applied $fill in the blank
f. Completed jobs $fill in the blank
g. Cost of goods sold $fill in the blank
h. Indirect labor $fill in the blank
2. Determine the June 30 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.
| Materials: | $fill in the blank |
| Work in Process: | $fill in the blank |
| Finished Goods: | $fill in the blank |
| Factory Overhead: | $fill in the blank |
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