Rodman Corporation’s fiscal year ends on November 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year.
Other data:
1. On December 1, two jobs were in process: Job No. 154 and Job No. 155. These jobs had combined direct materials costs of $9,860 and direct labor costs of $16,800. Overhead was applied at a rate that was 75% of direct labor cost.
2. During December, Job Nos. 156, 157, and 158 were started. On December 31, Job No. 158 was unfinished. This job had charges for direct materials $4,300 and direct labor $5,100, plus manufacturing overhead. All jobs, except for Job No. 158, were completed in December.
3. On December 1, Job No. 153 was in the finished goods warehouse. It had a total cost of $5,600. On December 31, Job No. 157 was the only job finished that was not sold. It had a cost of $4,300.
4. Manufacturing overhead was $760 overapplied in December.
List the letters (a) through (m) and indicate the amount pertaining to each letter.
Raw Materials Inventory
Dec. 1 Beginning balance (a) ??
31 Purchases 19,980
Dec. 31 Requisitions 18,500
Dec. 31 Ending balance 8,220
Work in Process Inventory
Dec. 1 Beginning balance (b) ??
31 Direct materials (c) ??
31 Direct labor 9,400
31 Overhead (d) ??
Dec. 31 Jobs completed (f)??
Dec. 31 Ending balance (e)??
Finished Goods Inventory
Dec. 1 Beginning balance (g)??
31 Completed jobs (h) ??
Dec. 31 Cost of goods sold (i)??
Dec. 31 Ending balance (j)??
Factory Labor
Dec. 31 Factory wages 12,210
Dec. 31 Wages assigned (k)??
Manufacturing Overhead
Dec. 31 Indirect materials 2,100
31 Indirect labor (l) ???
31 Other overhead 1,380
Dec. 31 Overhead applied (m) ??
Dec. 1 Beginning balance (a) ??
(A) Beginning balance = Ending balance + Requisitions -Purchases
Beginning balance = 8,220+18,500-19,980
Beginning balance = 6740
Work in Process Inventory
(b) Dec. 1 Beginning balance ??
Beginning balance = 9,860+16,800+ 16,800 x 75% = 39260
(c) Direct materials ??
Direct materials = Requisitions – Indirect material
Direct materials = 18,500-2,100=16400
(d) Overhead ??
Overhead = 9,400 x 0.75 = 7050
(E) Ending balance ??
Ending balance = 4,300 + 5,100 +5,100 x 0.75 = 13225
(f)Jobs completed ??
Jobs completed = Beginning balance (b) + Direct materials (c) + Direct labor Overhead (d) – Ending balance (e)
Jobs completed = 39260+ 16400+9,400+7050-13225=58885
Overhead applied = 7050 -760-2,100-1,380=2810
Manufacturing overhead was $760 overapplied in December.
Factory Labor
Dec. 31 Factory wages 12,210
Dec. 31 Wages assigned (k)??
The Wages assigned equal to Factory wages.
So, Wages assigned (k) = 12,210
Wayman Corporation reports the following amounts in its December 31, 2015, income statement.
Sales revenue $ 397,000 Income tax expense $ 51,000
Interest expense 21,000 Cost of goods sold 131,000
Salaries expense 41,000 Advertising expense 31,000
Utilities expense 51,000
Required:
Prepare a multiple-step income statement.
Sales revenue 397,000
Cost of goods sold 131,000
Gross profit 266,000
Salaries expense 41,000
Utilities expense 51,000
Advertising expense 31,000
Total operating expenses 123,000
Operating income 143,000
Interest expense 21,000
Income before income taxes 122,000
Income tax expense 51,000
Net income 71,000
