Managerial Accounting

Managerial Accounting

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Winfrey Co.’s March 31 inventory of raw materials is $140,000. Raw materials purchases in April are $470,000, and factory payroll cost in April is $253,000. Overhead costs incurred in April are: indirect materials, $24,000; indirect labor, $15,000; factory rent, $19,000; factory utilities, $11,000; and factory equipment depreciation, $68,100. The predetermined overhead rate is 55% of direct labor cost. Job 306 is sold for $360,000 cash in April. Costs of the three jobs worked on in April follow.

	Job 306			Job 307			Job 308
Balances on March 31
Direct materials		$	14,000		$	21,000
Direct labor			14,000			6,000
Applied overhead			7,700			3,300
Costs during April
Direct materials			95,000			170,000		$	65,000
Direct labor			28,000			70,000			140,000
Applied overhead			?			?			?

Status on April 30	Finished (sold)			Finished (unsold)				In process

references

value:
10.00 points

Required:
1.	Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31). (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response. )

306

307

308

April Total

Beginning goods in process
(From March)

a.	Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.)
b.	Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory.
c.	Transfer of Jobs 306 and 307 to the Finished Goods Inventory.
d.	Cost of goods sold for Job 306.
e.	Revenue from the sale of Job 306.
f.	Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

2.	Prepare journal entries for the month of April to record the above transactions. (Omit the “$” sign in your response.)

General Journal

Debit

Credit

To record materials purchases.

3.	Prepare a manufacturing statement for April (use a single line presentation for direct materials and show the details of overhead cost.) (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

WINFREY COMPANY
Manufacturing Statement
For Month Ended April 30

4.1

Compute gross profit for April. (Omit the “$” sign in your response.)

Gross profit

a.	Direct materials costs to Goods in Process Inventory.
b.	Direct labor costs to Goods in Process Inventory.
c.	Overhead costs to Goods in Process Inventory.
d.	Indirect materials costs to the Factory Overhead account.
e.	Indirect labor costs to the Factory Overhead account.

Required:
1.	Prepare journal entries to assign the above costs. (Omit the “$” sign in your response.)

Date

General Journal

Debit

Credit

2.1

Determine the revised balance of the Factory Overhead account after making the entries in part 1. Determine whether there is any under- or overapplied overhead for the year. (Input all amounts as positive values. Omit the “$” sign in your response.)

3.	Prepare a revised trial balance. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities (in order of their liquidity), Equity, Revenues, and Expenses. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

THAI BAY COMPANY
Trial Balance
December 31, 2011

Debit

Credit

4.1

Prepare an income statement for year 2011. (Amounts to be deducted and net loss amount should be indicated with minus sign. Omit the “$” sign in your response.)

THAI BAY COMPANY
Income Statement
For Year Ended December 31, 2011

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