Assigning Costs to Jobs: Pawnee Workshops. 7-18 Assigning Costs to Jobs: Pawnee Workshops. 1. Materials Inventory ........................................................... 16,000 Accounts Payable ......................................................... 2. Manufacturing Overhead Control ..................................... 800 Materials Inventory ....................................................... 3. 11,200 4. Accounts Payable ............................................................ Cash ............................................................................. 5. Work-in-Process—Direct Materials .................................. 13,600 6. Work-in-Process—Direct Labor........................................ 20,000 Wages Payable ............................................................ 7. 21,200 8. Work-In-Process— Overhead ($20,000 x 125%) ............. 25,000 Applied Manufacturing Overhead .............................. 9. 10,000 Accumulated Depreciation—Property, Plant, and Equipment ................................................................ 10,000

The Inventory Accounts and Cost Flows Materials Work-In-Process Finished Goods Beg. Inventory Beg. Inventory Beg. Inventory Cost of Goods Completed and Transferred from WIP + + Purchases Direct Materials Transferred from Raw Materials + Materials Available for Production = Direct Labor + Goods Available for Sale = Manufacturing Overhead + Materials T’ferred to WIP or OH Control - Raw Materials Transferred to Cost of Goods Sold - Total Manufacturing Costs = Ending Inventory = Ending Inventory = Cost of Goods Completed and Transferred to Finished Goods - Cost of Goods Completed and Transferred to Finished Goods - To the income statement Overhead Account(s) Ending Inventory =

Pr. 7-18 continued

7-18 concluded Stated otherwise: CGS= BIFG +Goods Completed –EIFG

7-21. (25 min.) Assigning Costs to Jobs: Cardinals, Inc. a. $96,000, the credit side of the Materials Inventory account. b. $72,000. Direct labor..............................................$90,000 Labor rate................................................$30 per hour Direct labor-hours....................................$90,000/$30 = 3,000 hours Manufacturing overhead applied .............3,000 x $24 = $72,000 c. $180,000, the debit addition to the Finished Goods Inventory account. d. $138,000. BB + TI – TO = EB EB = $60,000 + ($96,000 + $90,000 + $72,000) – $180,000 EB = $138,000 $6,000 (underapplied) = $78,000 – $72,000. $96,000. Sales......................... Cost of Goods Solda $126,000 $270,000 S&A costs ................. 48,000 174,000 Operating profit ........ $96,000

7-21 concluded f. $96,000. Sales......................... Cost of Goods Solda $126,000 $270,000 S&A costs ................. 48,000 174,000 Operating profit ........ $96,000 a The credit from Finished Goods Inventory for $120,000 plus $6,000 underapplied overhead.

e. 7-23. Assigning Costs to Jobs: Pine Ridge Corporation. $190,000, the credit side of the Materials Inventory account. (There are no indirect materials!) $5,000 underapplied (= $155,000 Control – $150,000 Applied). DL cost is the basis, so: 80% (= $150,000 Applied ÷ $187,500 Direct Labor Cost). $345,000, the debit addition to the Finished Goods Inventory account. e. BB + TI – TO = EB EB = $100,000 + ($190,000 + $187,500 + $150,000) – $345,000 EB = $282,500

7-23 concluded

7-24

7-26

7-35

Ex. 7-38

7-46. (55 min.) Tracing Costs In A Job Company: Dungan Cabinetry