Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as required. On August 1, the Materials Inventory account had a balance of $55,300. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on August 1 with the following costs: Job 84 $ 24,400 21,600 8,640 Materials and equipment Direct labor Overhead (applied) Overhead has been applied at 40 percent of the costs of direct labor using an annual rate. During August, Manor Painting started two new jobs. Additional work was carried out on Jobs 84 and 87. Job 87 was completed and billed to the customer. Details on the costs incurred on jobs during August follow: Job 87 $ 80, 100 40,700 16,280 Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation Job 84 Job 87 $5,800 $ 8,500 9,100 11,400 10, 200 Job 88 $8,200 Materials and equipment Direct labor (wages payable) Other August Events 1. Purchased materials and equipment for $15,400. 2. Billed $196,300 to the customer for Job 87 and received payment for $116,300 of that amount. 3. Received $19,900 payment on Job 82 delivered to customer in July. 4. Determined that payroll for indirect labor personnel totaled $2,360. 5. Issued supplies and incidental materials for current jobs costing $880. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation): $ 1,030 1,180 1,760 Job 90 $ 5,700 3,700 1,330 1,030 810 2,850
Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as required. On August 1, the Materials Inventory account had a balance of $55,300. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on August 1 with the following costs: Job 84 $ 24,400 21,600 8,640 Materials and equipment Direct labor Overhead (applied) Overhead has been applied at 40 percent of the costs of direct labor using an annual rate. During August, Manor Painting started two new jobs. Additional work was carried out on Jobs 84 and 87. Job 87 was completed and billed to the customer. Details on the costs incurred on jobs during August follow: Job 87 $ 80, 100 40,700 16,280 Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation Job 84 Job 87 $5,800 $ 8,500 9,100 11,400 10, 200 Job 88 $8,200 Materials and equipment Direct labor (wages payable) Other August Events 1. Purchased materials and equipment for $15,400. 2. Billed $196,300 to the customer for Job 87 and received payment for $116,300 of that amount. 3. Received $19,900 payment on Job 82 delivered to customer in July. 4. Determined that payroll for indirect labor personnel totaled $2,360. 5. Issued supplies and incidental materials for current jobs costing $880. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation): $ 1,030 1,180 1,760 Job 90 $ 5,700 3,700 1,330 1,030 810 2,850
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 20P: Chrome Solutions Company manufactures special chromed parts made to the order and specifications of...
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Transcribed Image Text:Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials
and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as required. On August 1,
the Materials Inventory account had a balance of $55,300. The Work-in-Process Inventory account is maintained to record costs of
work not yet complete. There were two such jobs on August 1 with the following costs:
Materials and equipment
Direct labor
Overhead (applied)
Overhead has been applied at 40 percent of the costs of direct labor using an annual rate.
Materials and equipment
Direct labor (wages payable)
Job 84
$ 24,400
21,600
8,640
During August, Manor Painting started two new jobs. Additional work was carried out on Jobs 84 and 87. Job 87 was completed and
billed to the customer. Details on the costs incurred on jobs during August follow:
Property taxes
Storage area rental
Job 87
$ 80,100
40,700
16,280
Truck and delivery cost
Advertising and promotion campaign
Inspections
Telephone and other miscellaneous
Equipment depreciation
Job 84
$ 5,800
9,100
Job 87
$ 8,500
11,400
Other August Events
1. Purchased materials and equipment for $15,400.
2. Billed $196,300 to the customer for Job 87 and received payment for $116,300 of that amount.
3. Received $19,900 payment on Job 82 delivered to customer in July.
4. Determined that payroll for indirect labor personnel totaled $2,360.
5. Issued supplies and incidental materials for current jobs costing $880.
6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation):
Job 88
$ 8,200
10, 200
$ 1,030
1,180
1,760
1,330
1,030
810
2,850
Job 90
$ 5,700
3,700
Transcribed Image Text:a. Prepare journal entries to record the flow of costs for operations during August.
b. Calculate the amount of over- or underapplied overhead for the month. This amount is debited or credited to Cost of Goods Sold.
c. Determine inventory balances for Materials and Equipment Inventory and Work-in-Process Inventory.
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