Prepare a schedule of cost of goods manufactured

Reference no: EM131110224

Assignment

PETER'S PET TOYS makes toys and supplies for cats and dogs out of reusable/recycled materials when possible. All problems and exercises are based on PETER'S PET TOYS.

Week 3 Peter's Pet Toys uses a JOB ORDER COSTING system. It applies manufacturing overhead cost to jobs on the basis of direct labor hours. Past experience has shown this allocation base to have a good correlation with overhead.

At the start of 2016, on Jan 1, estimates were for 10,000 direct labor hours at $20/hour. Total manufacturing overhead was estimated to be $140,000. (60 PTS)

A) If you calculate the predetermined overhead rate first, save it for transaction #4. Record the journal entries below in correct format. A General Journal has been provided if you wish to use it. Use whole dollars only. No cents.

1. Raw materials were bought for $820,000 cash.

2. Cleaning Supplies were bought for $45,000 cash.

3. Raw materials requisitioned to be put into production were $745,000

4. Put into use in both the manufacturing factory and office were $20,000 of cleaning supplies; the expense was split evenly between the two facilities.

5. The payroll was:

Administrative Salaries..............$182,000
Sales Commissions Exp...... .......$167,000
Direct Labor...........................$222,000 at $22/hour, 10,100 direct labor hours
Indirect Labor.........................$92,000

All salaries and wages were recorded and paid in cash during the year.

6. Manufacturing Overhead was applied.

7. The advertising agency was owed $130,000, to be paid the following year.

8. Pet toys that were completed were transferred from Work in Process to Finished Goods, $600,000.

9. For the year, Sales totaled $980,000. All sales were on account to credit customers. Cost of Goods Sold was $398,000.

10. Depreciation of $84,000 was recorded for the year, one quarter on the manufacturing plant three quarters for the administrative office.

11. Insurance for the period was $26,000. 80% was allocated to the manufacturing facilities and 20% was allocated to the administrative office. Cash was paid for the insurance, which was expensed. The company does not use prepaid insurance.

12. Peter's Pet Toys pays an income tax rate of 18% on Net Operating Income. The taxes were paid before year end in cash. The entry to record income tax expense is best be recorded when the income statement is complete.

B) The following select accounts have these beginning balances on Jan 1. This is not a complete listing of ledger beginning balances for Peter's Pet Toys.

Cash, $4,000,000
Raw Materials Inventory, $10,000
Work in Process Inventory, $2,000
Finished Goods Inventory, $140,000

If you wish to use it, a partial general ledger has been provided in Excel (FINAL PROJ 3 OPTIONAL LEDGER) so that you may post the journal entries to determine account balances. You are not required to submit the ledger. There are no points for the ledger.

C) Record the entry for underapplied or overapplied manufacturing overhead in the General Journal.

D) Prepare a Schedule of Cost of Goods Manufactured in good form for 2016 with the proper heading. Be sure to double rule where necessary.

E) Prepare a Schedule of Cost of Goods Sold (adjusted by overhead) in good form for 2016 with the proper heading. Be sure to double rule where necessary.

F) Prepare an Income Statement (traditional format as shown in the examples this week) in good form for 2016 with the proper heading. Income Taxes should be deducted to yield a final Net Income14figure. Be sure to double rule where necessary.

Reminder: Record the income tax expense in the general journal.

Reference no: EM131110224

Questions Cloud

Created during the installation process : Some Linux distributions are set up so that a root userid is not created during the installation process. In such cases, your regular password serves as the superuser password. Why would a distribution be set up in this way? What are the advantage..

The most expensive metal in the world : The element lutetium is a very heavy, rare, silvery white metal. It is considered to be the most expensive metal in the world. The Maharaja of Gaipajama wants you to babysit with his son.

Creation of the integration layer : Creation of the integration layer - E-R diagram of your integration layer and Insert the same records in the schema of local DB2

What happens to the price level after the change : What happens to the aggregate demand curve after the refund? What happens to the price level after this change? Is real wealth increased or decreased as a result of the refund?

Prepare a schedule of cost of goods manufactured : Prepare a Schedule of Cost of Goods Manufactured in good form for 2016 with the proper heading. Be sure to double rule where necessary.

Create a title sequence for an existing alice world : The list of effects on the animations schemes or custom animations on the Slide Show menu in PowerPoint might give you some ideas for your title sequences in Alice.

Compute the second years depreciation expense : Compute the second year's depreciation expense: 160,000 times 20% equals 32,000. Compute the first year's depreciation expense: 200,000 times 20% equals 40,000.

Playing a gui-based game on his linux laptop : What is a run level? At this very moment, Fester Bester tester is sitting at the back of a lecture hall listening to a boring lecture on animal husbandry. To keep himself awake, Fester is playing a GUI-based game on his Linux laptop. What is the r..

Discuss the problems inherent in the common law rules : Discuss the problems inherent in the common law rules on offer and acceptance in determining exactly if and when a bilateral contract was formed particularly where commercial parties use their own standard terms

User Account

All Pages