INDIVIDUAL ASSIGNMENT
Managerial Accounting
Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to the jobs on the basis of machine-hours. At the beginning of the year, it was estimated that the company would work 240,000 machine-hours and incur $4,800,000 in manufacturing overhead costs.
The company spent the entire month of January working on a large order for 16,000 custom-made machined parts. The company had no Work in process at the beginning of January. Cost data related to January follow:
1. Prepare journal entries to record items (a) through (f) above [ignore item (g) for the moment].
2. Prepare T-accounts for Manufacturing Overhead and Work on Process. Post the relevant items from your journal entries to these T-accounts.
3. Prepare a journal entry for item (g) above.
4. Compute the unit product cost that will appear on the job cost sheet
Work:
1.
a. | Raw Materials | $325,000 |
Accounts Payable | $325,000 | |
b. | Work in process | $232,000 |
Manufacturing overhead | $58,000 | |
Raw Materials | $290,000 | |
c. | Work in process | $60,000 |
Manufacturing Overhead | $120,000 | |
Salaries and Wages Payable | $180,000 | |
d. | Manufacturing Overhead | $75,000 |
Accumulated Depreciation | $75,000 | |
e. | Manufacturing Overhead | $62,000 |
Accounts Payable | $62,000 | |
f. | Work in process (15000 x ($4,800,000/240,000)) | $300,000 |
Applied Manufacturing overhead |
Work in process Assume all are completed
2.
Manufacturing Overhead |
|
b |
$58,000 |
c |
$120,000 |
d |
$75,000 |
e |
$62,000 |
f |
$300,000 |
Balance $15,000 |
Work in progress |
|
b |
$232,000 |
c |
$60,000 |
f |
$300,000 |
Balance 592,000 |
Work in process Assume all are completed
3.
*Work in process (15000 x (4800000/240000)) = 300,000
Applied Manufacturing Overhead
Close the Manufacturing Overhead T account
*Actual Manufacturing Overhead = Indirect Material (58000) + indirect labour (120000) + depr (75000) + other Manufacturing overhead (62000)
= Actual Manufacturing Overhead = 315,000
*Applied Manufacturing Overhead = 300,000
=> Unapplied manufacturing overhead = 315,000 - 300,000 = $15,000
So, under applied Manufacturing overhead needs to be booked
Under applied Manufacturing overhead |
$ 15,000 |
Manufacturing overhead |
$15,000 |
Close Under Applied Manufacturing overhead to COGS |
$15,000 |
Cost of good sold under applied |
$15,000 |
Manufacturing overhead |
$15,000 |
4 .Product cost/ unit =$ 592,000/16000 = $37
Assignment Writing Help
Engineering Assignment Services
Do My Assignment Help
Write My Essay Services