Part 1: Information to use in completing is below and the requirements follow wh
ID: 2534968 • Letter: P
Question
Part 1: Information to use in completing is below and the requirements follow where you will answer the questions. Glass Company makes glass orders based on the customer specifications, so the company uses job costing to track costs. 1. The company uses direct labor hours as the cost driver for manufacturing overhead application. The company estimated the following manufacturing overhead costs for the year: $600,000 The company estimated the following usage of direct-labor hours for the year: 200,000 2. Beginning Work-in-process, March 1 (Job 57) $108,000 3. Beginning Finished Goods, March 1 (Job 55) $125,000 2. Labor Information for March: Direct-labor hours: Job 57 7,000 Job 58 6,000 Job 59 4,000 Labor costs: Direct-labor wages $408,000 Indirect-labor wages $30,000 Supervisory salaries $12,000 3. Material Information for March: Raw Materials, Inventory, March 1 $21,000 Purchase or raw material $210,000 Direct materials requisitioned: Job 57 $90,000 Job 58 $75,000 Job 59 $51,000 4. Other costs incurred in March: Factory Utilities $12,000 Sales offices Utilities $3,200 Administrative offices Utilities $2,000 Factory equipment repair and maintenance costs $11,200 Depreciation on factory equipment $5,000 Manufacturing supplies purchased and used $24,000 5. During March the following jobs were completed and sold for the following sales price: Job 57 $400,000 Job 58 $250,000 Required: You need to use cell references to provide answers and calculations. 1. Develop the predetermined overhead rate. 2. Complete the job cost sheets provided below for the month of March: Job 57 Job 58 Job 59 Beginning Balance Current costs: Direct materials Direct Labor Applied overhead Total 3. Determine the ending Work-In-Process Inventory at the end of March and provide the number of the Job(s) still in Work-in-Process at the end of March and the determine total cost of ending work in process for March. 4. Determine the ending Finished Goods for March and provide the number of the Job(s) in Finished Goods at the end of March and determine the total cost of ending finished goods for March. 5. Determine the Cost of Goods Sold for March and provide the number of the Job(s) in Cost of Goods Sold for March and determine the total cost of goods sold for March. 6. Prepare a statement of cost of goods manufactured for March below. Use Manufacturing Overhead applied in your statement. Glass Company Statement of Cost of Goods Manufactured For Month ending March 31, 2018 Part 1: Information to use in completing is below and the requirements follow where you will answer the questions. Glass Company makes glass orders based on the customer specifications, so the company uses job costing to track costs. 1. The company uses direct labor hours as the cost driver for manufacturing overhead application. The company estimated the following manufacturing overhead costs for the year: $600,000 The company estimated the following usage of direct-labor hours for the year: 200,000 2. Beginning Work-in-process, March 1 (Job 57) $108,000 3. Beginning Finished Goods, March 1 (Job 55) $125,000 2. Labor Information for March: Direct-labor hours: Job 57 7,000 Job 58 6,000 Job 59 4,000 Labor costs: Direct-labor wages $408,000 Indirect-labor wages $30,000 Supervisory salaries $12,000 3. Material Information for March: Raw Materials, Inventory, March 1 $21,000 Purchase or raw material $210,000 Direct materials requisitioned: Job 57 $90,000 Job 58 $75,000 Job 59 $51,000 4. Other costs incurred in March: Factory Utilities $12,000 Sales offices Utilities $3,200 Administrative offices Utilities $2,000 Factory equipment repair and maintenance costs $11,200 Depreciation on factory equipment $5,000 Manufacturing supplies purchased and used $24,000 5. During March the following jobs were completed and sold for the following sales price: Job 57 $400,000 Job 58 $250,000 Required: You need to use cell references to provide answers and calculations. 1. Develop the predetermined overhead rate. 2. Complete the job cost sheets provided below for the month of March: Job 57 Job 58 Job 59 Beginning Balance Current costs: Direct materials Direct Labor Applied overhead Total 3. Determine the ending Work-In-Process Inventory at the end of March and provide the number of the Job(s) still in Work-in-Process at the end of March and the determine total cost of ending work in process for March. 4. Determine the ending Finished Goods for March and provide the number of the Job(s) in Finished Goods at the end of March and determine the total cost of ending finished goods for March. 5. Determine the Cost of Goods Sold for March and provide the number of the Job(s) in Cost of Goods Sold for March and determine the total cost of goods sold for March. 6. Prepare a statement of cost of goods manufactured for March below. Use Manufacturing Overhead applied in your statement. Glass Company Statement of Cost of Goods Manufactured For Month ending March 31, 2018Explanation / Answer
1) Calculation of predetermined overhead rate
Manufacturing and production Overheads are loaded to products/jobs based on the certain predetermined rate.
Basis for overherad allocation cab be machine hours and labour depending upon the nature of industry and company policy
Here, Estimated manufacturing overhead is $ 600,000
No. of Direct labour hours are 200,000
Direct Labour hours are used as a basis for allocating overhead to jobs
Pre-determined rate = Estimated manufacturing overhead
Estimated No. of Direct Labour Hours
Pre-determined rate = $600,000
200,000
Pre-determined rate = $3
2) Job Cost Sheet
Before doing job costing, we should arrive at labour rate to be applied for the calculation of job wise labour cost
Labour Rate = Direct Labour Wages
No. of Direct Labour Hours
Labour Rate = $408,000
(7000+6000+4000)
Labour Rate = $408,000
17,000
Labour Rate = $24
Job Cost Sheet
Direct Labour
(Labour Rate * No.of Direct Labour Hours)
Applied Overheads
(Overhead Rate * No of Direct Labour Hours)
3) Calculation of Job wise Opening and Closing Work in progress
Direct Labour
Applied Overheads
Closing work in Progress for Job 57 and 58 is NIL as these jobs have been processed and sold during March
4) Calculation of Job wise Opening and Closing Finished Goods
Jobs Sold
Closing Finished Goods
5) Computation of Cost of Goods Sold
Total of Other Cost incurred in March for carrying out production
Cost of Goods Sold - Job Wise
Cost of Goods Sold at Company Level
Particulars Job 57 Job 58 Job 59 Total Opening Balance $108,000 - - $108,000 Current Cost Direct Material $90,000 $75,000 $51,000 $216,000Direct Labour
(Labour Rate * No.of Direct Labour Hours)
$168,000 $144,000 $96,000 $408,000Applied Overheads
(Overhead Rate * No of Direct Labour Hours)
$21,000 $18,000 $12,000 $51,000 Total $387,000 $237,000 $159,000