Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 1, Problem 10P

Sultan, Inc. manufactures goods to special order and uses a job order cost system. During its first month of operations, the following selected transactions took place:

Chapter 1, Problem 10P, Sultan, Inc. manufactures goods to special order and uses a job order cost system. During its first , example  1

Chapter 1, Problem 10P, Sultan, Inc. manufactures goods to special order and uses a job order cost system. During its first , example  2

Required:

  1. 1. Prepare a schedule reflecting the cost of each of the four jobs.
  2. 2. Prepare journal entries to record the transactions.
  3. 3. Compute the ending balance in Work in Process.
  4. 4. Compute the ending balance in Finished Goods.

1.

Expert Solution
Check Mark
To determine

Prepare a schedule that reflects the cost of all four jobs.

Explanation of Solution

Prepare a schedule that reflects the cost of all four jobs.

Particulars

Job 101

($)

Job 102 ($)Job 103 ($)

Job 104

($)

Total

Cost ($)

Direct Materials2,2005,7007,1001,70016,700
Direct Labor2,7006,8009,2002,10020,800
Factory Overhead1,2002,0003,8001,0008,000
Total6,10014,50020,1004,80045,500

Table (1)

2.

Expert Solution
Check Mark
To determine

Provide journal entry to record the given transactions.

Explanation of Solution

Provide journal entry to record the given transactions.

DateAccounts title and explanationDebit ($)Credit ($)
aMaterials37,000 
 Accounts payable 37,000
 (To record materials purchased on account)  
    
bWork in Process16,700 
 Factory overhead1,350 
 Materials 18,050
 (To record issue of direct materials and indirect materials)  
    
cPayroll23,050 
     Wages Payable 23,050
 (To record factory wages and salaries)  
    
dWork in Process20,800 
 Factory overhead2,250 
 Payroll 23,050
 (To record payment of wages to the labor)  
    
eFactory overhead2,400 
    Accounts payable 2,400
 (To record factory overhead costs on account)  
    
f.Factory overhead2,000 
    Accumulated Depreciation - Machinery 2,000
 (To record depreciation on factory machine)  
    
g.Work in Process8,000 
          Factory Overhead 8,000
 (To record transfer of factory overhead to Work-in process)  
    
h.Finished Goods (1)40,700 
        Work in Process 40,700
 (To record the transfer of cost of completed work to finished goods)  
    
iAccounts receivable39,000 
        Sales 39,000
 (To record the sale made on account)  
    
 Cost of goods sold (2)20,600 
        Finished goods 20,600
 (To record the cost of goods sold)  

Table (2)

Working note 1: Calculate the cost of completed work (finished goods).

Finished goods =Job110+Job102+Job103=$6,100+$14,500+$20,100=$40,700

Working note 2: Calculate the cost of goods sold.

Cost of goods sold =Job101+Job102=$6,100+$14,500=$20,600

3.

Expert Solution
Check Mark
To determine

Calculate the ending balance in work-in process.

Explanation of Solution

Calculate the ending balance in work-in process.

Ending balance in work-in process = (Beginningworkinprocess +Directmaterials+Direct labor +Factory overhead  Finished goods )=($0+$16,700+$20,800+$8,000)$40,700=$4,800

Hence, the ending balance in work-in process is $4,800.

4.

Expert Solution
Check Mark
To determine

Calculate the ending balance in finished goods.

Explanation of Solution

Calculate the ending balance in finished goods.

Ending balance in finished goods = (Beginningbalanceoffinishedgoods +Finished goods during the period Cost of goods sold)=$0+$40,700$20,600=$20,100

Hence, the ending balance in finished goods is $20,100.

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Chapter 1 Solutions

Principles of Cost Accounting

Ch. 1 - Define responsibility accounting.Ch. 1 - What criteria must be met for a unit of activity...Ch. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - What actions should a CMA take when the...Ch. 1 - Prob. 16QCh. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - How is cost accounting related to: financial...Ch. 1 - How does the computation of cost of goods sold for...Ch. 1 - How would you describe the following accounts:...Ch. 1 - Prob. 22QCh. 1 - What is the difference between a perpetual...Ch. 1 - What are the basic elements of production cost?Ch. 1 - How would you define the following costs: direct...Ch. 1 - Why have companies such as Harley-Davidson stopped...Ch. 1 - Distinguish prime cost from conversion cost. Does...Ch. 1 - In what way does the accounting treatment of...Ch. 1 - How do cost of goods sold and cost of goods...Ch. 1 - How are nonfactory costs and costs that benefit...Ch. 1 - What is a mark-on percentage?Ch. 1 - Prob. 32QCh. 1 - When is process costing appropriate, and what...Ch. 1 - What are the advantages of accumulating costs by...Ch. 1 - What is a job cost sheet, and why is it useful?Ch. 1 - What are standard costs, and what is the purpose...Ch. 1 - If the factory operations and selling and...Ch. 1 - Study the performance report for Barbaras Bistro...Ch. 1 - Note that Barbaras Bistro in Figure 1-2 prepares...Ch. 1 - Cost of goods soldmerchandiser The following data...Ch. 1 - The following data were taken from the general...Ch. 1 - Prob. 5ECh. 1 - Explain in narrative form the flow of direct...Ch. 1 - The following data are taken from the general...Ch. 1 - The following data are taken from the general...Ch. 1 - The following inventory data relate to Edwards,...Ch. 1 - The following is a list of manufacturing costs...Ch. 1 - Leen Production Co. uses the job order cost system...Ch. 1 - Gerken Fabrication Inc. uses the job order cost...Ch. 1 - Cycle Specialists manufactures goods on a job...Ch. 1 - Prepare a performance report for the dining room...Ch. 1 - The following data were taken from the general...Ch. 1 - The following data were taken from the general...Ch. 1 - Statement of cost of goods manufactured; income...Ch. 1 - The adjusted trial balance for Appleton...Ch. 1 - The post-closing trial balance of Custer Products,...Ch. 1 - Selected account balances and transactions of...Ch. 1 - OReilly Manufacturing Co.s cost of goods sold for...Ch. 1 - Glasson Manufacturing Co. produces only one...Ch. 1 - Sultan, Inc. manufactures goods to special order...Ch. 1 - Spokane Production Co. obtained the following...Ch. 1 - Bangor Products Co. obtained the following...Ch. 1 - Potomac Automotive Co. manufactures engines that...Ch. 1 - Required Ethics Mary Branson is the Division...
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