Name: Silvio Noel Gutierrez

Managerial Accounting
Mr. Leopoldo Lopez
Problem 2-1 A
Job 306
Balances on March 31
Direct materials
Direct labor
Applied overhead
Beginning goods in process for April
Cost during April
Direct materials
Direct labor
Applied overhead
Total cost added on April
Total Cost
Status on April 30
2)
Raw materials
Accounts Payable
Factory payroll
Cash

$14,000
$18,000
$9,000
$41,000
$100,000
$30,000
$15,000
$145,000
$186,000
Finished (sold)
Dr.
$400,000

$220,000

Factory Overhead
Raw Materials Inventory

$30,000

Factory Overhead
Factory payroll

$14,000

Factory overhead
Cash

$20,000

Factory Overhead
Cash

$12,000

Factory Overhead
Accumulated depreciation- Factory equipment

$30,000

b
Goods in Process
Raw Materials Inventory
(to assing direct materials to jobs)

$350,000

Goods in Process Inventory

Factory Payroll
(to assing direct labor jobs)

$206,000

Goods in process inventory

Factory Overhead
(to apply overhead to Jobs)

$103,000

Finished Goods inventory

Goods in Process Inventory
To record jobs completed

$482,000

Cost of Goods Sold

Finished Goods Inventory
( To record cost of saled of job)

$186,000

Cash
Sales
(To record sale of job)

$380,000

Cost of Goods Sold

Factory Overhead
(To assing underapplied overhead)

$3,000

Part 3
Winfrey Co.'s
Manufacturing Statement
For Month Ended September 30
Direct materials used.
Direct labor used
Factory overhead
Indirect materials
Indirect labor..
Factory rent.
Factory utilities
Depreciation of equipmment..
Total manufacturing costs
Add goods in process March 31 (Jobs 306 and 307)..
Total cost of goods in process
Less goods in process, April 30 ( Job 308).
Less cost underapplied overhead..
Cost of good manufactured.
Gross Profit for April

Sales
Cost of goods sold (186000+3000)
Gross Profit

$380,000
(189,000)
$191,000

Inventories
Raw materials
Goods in process
Finished goods
Total Inventories

$170,000
260,000
296,000
$726,000

Part 5
Overhead cost is underapplied, which means that individuals jobs or batches are
undercosted. So, the profits at the job level are overstated

me: Silvio Noel Gutierrez

Managerial Accounting
Mr. Leopoldo Lopez
Job 307

Job 308
$18,000
$16,000
$8,000
$42,000

$170,000
$80,000
$56,000
$120,000
$28,000
$60,000
$254,000
$260,000
$296,000
$260,000
Finished (unsold)
In process
Cr.
$400,000

$220,000

$30,000

$14,000

$20,000

$12,000

$350,000

April total

$83,000
$350,000
$206,000
$103,000
$659,000
$742,000

$206,000

$103,000

$482,000

$186,000

$380,000

$3,000

ement
ember 30
.

$350,000
206,000

$30,000
14,000
20,000
12,000
30,000

..

.
..
.

106,000
662,000
83,000
745,000
(260,000)
(3,000)
$482,000

bs or batches are

Problem 2-1A
Part 1.
a.
Dec. 31

Goods in Process Inventory

Raw Materials Inventory
to record direct materials cost

b.

Dec. 31

Goods in Process Inventory

Factory payroll
to record direct labor cost

c.

Dec. 31

Goods in Process Inventory

Factory overhead
To allocate overhead cost (200% of direct labor)

d.

Dec. 31

Factory overhead
Raw Materials Inventory
To add cost of indirect materials to actual factory overhead

e.

Dec. 31

Factory overhead
Factory Payroll
To add cost of indirect labor to actual factory overhead

Part 2.
Factory Overhead account
Ending balance form trial balanace
Overhead aplied to jobs 402 and 404
Indirect materials
Indirect labor
Underapplied overhead
Dec. 31

Cost of Goods Sold

Factory Overhead
To remove underapplied overhead from the factory overhead account and add i
sold

Part 3
Thai Bay's Co
Trial balance
Dec. 31, 2011
Cash.
Accounts receivable.
Raw materials inventory.
Goods in process Inventory.
Finished Goods Inventory..
Prepaid Rent.

Accounts payable
Notes payable.
Common Stock.
Retained earnings.
Sales
Cost of goods sold
Factory payroll
Factory overhead
Operating Expenses
Totals

Goods in process inventoy

Direct materials
Direct labor
overhead
Total cost

Cost of goods sold

Part 4

Part 4

Thai Bay's Co
Income Statement
For Year Ended December 31, 2011
Sales
Less Cost of goods sold
Gross profit
Less: Operating expenss
Net Income.

Thai Bay's Co
Income Statement
For Year Ended December 31, 2011
Assets
Cash
Accounts receivable
Inventories
Raw materials Inventory
Goods in process inventory
Finished goods inventory
Prepaid rent
Total Assets

Liabilities and equity

Accounts payable
Notes payable
Total Liabilities
Common stock
Retained earnings
Total stockholder's equity
Total liabilities and equity

Part
The 5
$2,100 error would cause the costs for Job 404 to be understated. Job 404 is in proc
period, goods in process inventory and total assets would both be understated on the balan
the over- or underapplied overhead would change by $2,100. Moreover, the over or unde
going to change by 2100. if the overhead is underapplied by 8100 this amount is going to
yielding 6000 underapplied overhead. then, any over or under applied overhead is charg
goods sold. correcting the mistale would cause cost of goods sold to decrease and net inc
2100.

Dr.

Cr.
12,200
12,200

13,000
13,000

26,000
26,000

2,100
2,100

3,000
3,000

Dr.

Cr.
27,000
26,000
2,100
3,000
6,100
6,100

6,100
head account and add it to cost of goods

$
$
$
$
$
$

48,000
42,000
11,700
51,200
9,000
3,000


.
.
.

$
$
$
$
$

$
$
$
$
$

10,500
13,500
30,000
87,000
180,000

111,100
45,000
321,000 $

321,000

Job 402

job 404
4,600
5,000
10,000
19,600 $

initial cost of

ent
er 31, 2011
.
.

Totals
7,600
8,000
16,000
31,600

111,100

180,000
(111,100)
68,900
(45,000)
23,900

ent
er 31, 2011
48,000
42,000

11,700
51,200
9,000

71,900
3000
164,900

12,200
13,000
26,000
51,200

10500
13500
24000
30000
110900
140900
164900

rstated. Job 404 is in process at the end of the

be understated on the balance sheet. In addition
Moreover, the over or under applied overhead is
8100 this amount is going to decrease by 2100
r applied overhead is charge directly to cost of
old to decrease and net income to decrease by

Job 136
Direct materials..
Direct labor..
Overhead.
Totals..
Job 137
Direct materials..
Direct labor..
Overhead.
Totals..
Job 138
Direct materials..
Direct labor..
Overhead.
Totals..
Job 139
Direct materials..
Direct labor..
Overhead.
Totals..
Job 140
Direct materials..
Direct labor..
Overhead.
Totals..
part 2
a.

b.

c.

d.

30,000
8,000
16,000
54,000

20,000
7,000
14,000
41,000

12,000
25,000
50,000
87,000

14,000
26,000
52,000
92,000

4,000
2,000
4,000
10,000

Dr.
Raw Materials Inventory
Accounts Payable

Cr.
125,000
125,000

Factory payroll
Cash

84,000

Factory overhead
Cash

11,000

Goods in process
Factory Overhead
Raw Materials Inventory

80,000
12,000

84,000

11,000

92,000

e.

f.

g.

h.

i.

j.

Goods in Process
Factory Overhead
Factory Payroll

68,000
16,000
84,000

Goods in Process Inventory

Factory Overhead

118,000

Finished Goods Inventory

Goods in Process Inventory

233,000

Sales
Accounts Receivable

340,000

Cost of Goods Sold

Finished Goods Inventory

141,000

118,000

233,000

340,000

141,000

Factory Overhead
Depreciation expense- Factory Building
Depreciation expense- Factory equipment
Prepaid Insurance
Property taxes expense

96,000

Goods in process Inventory

Factory Overhead

18,000

37,000
21,000
7,000
31,000

18,000
Raw Materials Inventory
(a) 125000
(b) 92000
33,000
Factory Payroll
(b)84000
(e) 8400
Goods in Process
Goods in Process Inventory
(d) 800,000 (g) 233000
(e) 68000
(f) 118000
(j) 18000
51,000

Report of Jobs Costs

Goods in Process Inventory

job 137.. $
job 140.. $
Balance
$

41,000
10,000
51,000

Finished Goods Inventory

Job 139.

92,000

Cost of Goods Sold

Job 136 $
Job 138$
Balance
$

54,000
87,000
141,000

Finished Goods Inventory

(g) 233000
(h) 141000
92,000

(c)
(d)
(e)
(i)

Factory Overhead
11000
(f) 118000
12000
(j) 18000
16000
96000
1,000

Cost of Goods Sold

(h) 141000
141,000