Meyer Company uses a job order cost system with overhead applied to jobs on the basis of direct labor hours. The direct labor rate is $20 per hour, and the predetermined overhead rate is $15 per direct labor hour. The company worked on three jobs during April. Jobs A and B were in process at the beginning of April. Job A was completed and delivered to the customer. Job B was completed during April, but not sold. Job C was started during April, but not completed. The job cost sheets revealed the following costs for April: Cost of Jobs in Process, 4/1/2013 Direct Materials Used Direct Labor Applied Manufacturing Overhead Job A Job B Job C $11,600 $1,200 1,600 7,200 7,800 9,200 7,200 2,600 Required: If no other jobs were started, completed, or sold, determine the balance in each of the following accounts at the end of April: a. Work in Process. b. Finished Goods. C. COGS. On January 1, 2016, Shelley Corporation signed a ten-year non- cancelable lease for certain machinery. The terms of the lease called for Shelley to make annual payments of $100,000 at the end of each year for ten years with title to pass to Shelley at the end of this period. The machinery has an estimated useful life of 15 years and no salvage value. Shelley uses the straight-line method of depreciation for all of its fixed assets. Shelley accordingly accounted for this lease transaction as a capital lease. The lease payments were determined to have a present value of $671,008 at an effective interest rate of 8%. With respect to this capitalized lease, Shelley should record interest and depreciation expense for 2016: Interest expense: Depreciation expense:
Meyer Company uses a job order cost system with overhead applied to jobs on the basis of direct labor hours. The direct labor rate is $20 per hour, and the predetermined overhead rate is $15 per direct labor hour. The company worked on three jobs during April. Jobs A and B were in process at the beginning of April. Job A was completed and delivered to the customer. Job B was completed during April, but not sold. Job C was started during April, but not completed. The job cost sheets revealed the following costs for April: Cost of Jobs in Process, 4/1/2013 Direct Materials Used Direct Labor Applied Manufacturing Overhead Job A Job B Job C $11,600 $1,200 1,600 7,200 7,800 9,200 7,200 2,600 Required: If no other jobs were started, completed, or sold, determine the balance in each of the following accounts at the end of April: a. Work in Process. b. Finished Goods. C. COGS. On January 1, 2016, Shelley Corporation signed a ten-year non- cancelable lease for certain machinery. The terms of the lease called for Shelley to make annual payments of $100,000 at the end of each year for ten years with title to pass to Shelley at the end of this period. The machinery has an estimated useful life of 15 years and no salvage value. Shelley uses the straight-line method of depreciation for all of its fixed assets. Shelley accordingly accounted for this lease transaction as a capital lease. The lease payments were determined to have a present value of $671,008 at an effective interest rate of 8%. With respect to this capitalized lease, Shelley should record interest and depreciation expense for 2016: Interest expense: Depreciation expense:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Meyer Company uses a job order cost system with overhead applied
to jobs on the basis of direct labor hours. The direct labor rate
is $20 per hour, and the predetermined overhead rate is $15 per
direct labor hour. The company worked on three jobs during April.
Jobs A and B were in process at the beginning of April. Job A was
completed and delivered to the customer. Job B was completed
during April, but not sold. Job C was started during April, but not
completed. The job cost sheets revealed the following costs for April:
Cost of Jobs in Process, 4/1/2013
Direct Materials Used
Direct Labor
Applied Manufacturing Overhead
Job A Job B Job C
$11,600 $1,200
1,600 7,200
7,800
9,200
7,200
2,600
Required: If no other jobs were started, completed, or sold,
determine the balance in each of the following accounts at the end
of April:
a. Work in Process.
b. Finished Goods.
C. COGS.
On January 1, 2016, Shelley Corporation signed a ten-year non-
cancelable lease for certain machinery. The terms of the lease called for
Shelley to make annual payments of $100,000 at the end of each year for
ten years with title to pass to Shelley at the end of this period. The
machinery has an estimated useful life of 15 years and no salvage value.
Shelley uses the straight-line method of depreciation for all of its fixed
assets. Shelley accordingly accounted for this lease transaction as a
capital lease. The lease payments were determined to have a present
value of $671,008 at an effective interest rate of 8%. With respect to this
capitalized lease, Shelley should record interest and depreciation
expense for 2016:
Interest expense:
Depreciation expense:
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