EXERCISE 3-15

(a) 1.

$14,125, or ($3,925 + $6,000 + $4,200).

2. Last year 70%, or ($4,200 $6,000); this year 75% (either $6,375
$8,500 or $3,000 $4,000).
(b) Jan. 31

Work in Process Inventory(6,600+2,000).

Raw Materials Inventory....................

8,000

31

Work in Process Inventory (8,500+4,000)

Factory Labour...................................

12,500

31

Work in Process Inventory(12,500x75%).

Manufacturing Overhead...................

9,375

31

Finished Goods Inventory.........................

Work in Process Inventory................

44,000

8,000
12,500
9,375
44,000

EXERCISE 3-21
(a)

HANNIFAN MANUFACTURING COMPANY

Cost of Goods Manufactured Schedule
For the Month Ended May 31, 2012
Work in process, May 1.........................................
Direct materials used.............................................
Direct labour...........................................................
Manufacturing overhead applied..........................
Total manufacturing costs.............................
Total cost of work in process................................
Less: Work in process, May 31............................
Cost of goods manufactured................................

(b)

$17,400
$54,200
32,000
40,000

126,200
143,600
17,900
$125,700

HANNIFAN MANUFACTURING COMPANY

(Partial) Income Statement
For the Month Ended May 31, 2012
Sales....................................................................
Cost of goods sold
Finished goods, May 1................................
Cost of goods manufactured.....................
Cost of goods available for sale................
Less: Finished goods, May 31..................
Cost of goods sold..............................
Gross profit.........................................................

$200,000
$12,600
125,700
138,300
15,400

122,900
$77,100

(c) In the May 31 balance sheet, the manufacturing inventories will be

reported in current assets as follows:
Finished goods....................................................
$15,400
Work in process...................................................
17,900
Raw materials.......................................................
7,100

EXERCISE 3-24
(a)

Koppel
Direct materials
$ 700
Auditor labour costs
5,400
Applied overhead
4,320
Total cost
$10,420

Dupont
$ 400
6,600
5,400
$12,400

Rojas
$ 250
3,375
2,400
$6,025

(b) The Koppel job is the only incomplete job, therefore, $10,420.
(c) Actual overhead
Applied overhead
Balance

$12,000 (DR)
12,120 (CR)
$ 120 (CR) Over-applied

TOTAL

12,120

PROBLEM 3-27A
(a)$1,500,000 $750,000 direct labour costs = 200% of direct labour costs
(b) See solution to part (e) for job cost sheets
(c) Raw Materials Inventory............................................. 100,000
Accounts Payable................................................
Factory Labour............................................................
Factory Wages Payable.......................................
Employer Payroll Taxes Payable........................

75,000

Manufacturing Overhead............................................
Accounts Payable................................................
Accumulated Depreciation.................................
Raw Materials Inventory......................................
Factory Labour....................................................

71,000

(d) Work in Process Inventory.........................................

Raw Materials Inventory......................................
($12,000 + $42,000 + $35,000)

89,000

Work in Process Inventory.........................................

Factory Labour....................................................
($7,000 + $28,000 + $22,000)

57,000

Work in Process Inventory......................................... 114,000

Manufacturing Overhead....................................
($57,000 200% of direct labour costs)
(e) See next page for postings to job cost sheets.

100,000
57,000
18,000
22,000
14,000
18,000
17,000
89,000

57,000

114,000

PROBLEM 3-27A (Continued)

(b)&(e)
Job Cost Sheets
Job No. 50
Date
Direct Materials
Direct
Manufacturing Overhead
Labour
Beg.
$30,000
$15,000
*$20,000*
Jan.
12,000
7,000
* 14,000*
$42,000
$22,000
*$34,000*
Cost of completed job
Direct materials...............................................................
Direct labour....................................................................
Manufacturing overhead.................................................
Total cost.................................................................................

$42,000
22,000
34,000
$98,000

*$7,000 200%
Job No. 51
Date
Direct Materials
Jan.

$42,000
$42,000

Direct
Labour
$28,000
$28,000

Manufacturing Overhead
**$56,000**
**$56,000**

Cost of completed job

Direct materials................................................................ $ 42,000
Direct labour.................................................................... 28,000
Manufacturing overhead.................................................
56,000
Total cost................................................................................. $126,000
**$28,000 200%
Job No. 52
Date
Direct Materials
Jan.
$35,000
***$22,000 200%

Direct
Labour
$22,000

Manufacturing Overhead
***$44,000***

PROBLEM 3-27A (Continued)

(f)

(g)

Finished Goods Inventory.......................................

Work in Process Inventory...............................
($98,000 + $126,000)

224,000

Cost of Goods Sold..................................................

Finished Goods Inventory................................
($120,000 + $98,000)

218,000

Accounts Receivable...............................................
Sales..................................................................
($152,000 + $198,000)

350,000

Finished
Goods Inventory
Beginning balance
120,000 218,000
Cost of completed jobs 50 and 51 224,000
Ending balance
126,000

224,000

218,000

350,000

Cost of jobs 49 and 50 sold

The balance in this account consists of the cost of completed Job No.
51 which has not yet been sold.
(h) Manufacturing Overhead
Actual
Applied
71,000
114,000
43,000
The balance indicates that manufacturing overhead was over-applied
by $43,000.

PROBLEM 3-34A
Note: Some letters cannot be determined until subsequent letters are
solved.
(a) $84,000

($75,000 + $9,000).

(b) $21,400

($15,000 + $90,400 $84,000).

(c) $32,200

($19,000 + $13,200).

(d) $91,200

($114,000 125%).

(e) $114,000 (Given in Manufacturing Overhead account)

(f)

$307,025 ($32,200 + $75,000 + $91,200 + $114,000 $5,375).

(g) $5,375

[$2,000 + $1,500 + ($1,500 1.25)].

(h) $145,000 (Given in other data).

(i)

$307,025 (See (f) above).

(j)

$314,025 ($145,000 + $307,025 $138,000).

(k) $138,000 (Given in other data).

(l)

$107,200 (Same as (m)).

(m) $107,200 ($91,200 + $16,000).

(n) $92,000

($114,000 + $3,000 $9,000 $16,000)

PROBLEM 3-41B
(a) Check the relationship between direct labour and factory overhead
applied for several of the jobs to see what the overhead rate is:
Job 43: $288 $360 = 80% of direct labour cost.
Job 44: $792 $990 = 80% of direct labour cost.
Job 47: $680 $850 = 80% of direct labour cost.
The predetermined overhead rate is 80% of direct labour costs.
(b)

Total factory overhead applied

Less: beginning overhead
Overhead applied during the month
Less: over-applied overhead
Total factory overhead incurred

(1)

Work in process, beginning

Less: direct labour
Less: overhead applied
($150 80%)
Direct material

(c)

(d)

$2,832
120 (1)
2,712
600
$2,112

$570
150
12
0
$30
0

Direct materials shown on the job sheets

(Jobs 43 to 48)
Less: Direct materials in beginning WIP
Direct materials put into production in June

$4,190
300
$3,890

Direct labour shown on the job sheets

(Jobs 43 to 48)
Less: Direct labour in beginning WIP
Direct labour costs incurred in June

$3,540
150 (given)
$3,390

(1) above

PROBLEM 3-41 (Continued)

(e) Work in process inventory, June 1
Plus: manufacturing costs
Direct material
Direct labour
Factory overhead applied (DL 80%)
Total manufacturing costs
Less: Work in process inventory, June 30
Cost of goods manufactured for June
(f)

Finished goods inventory, June 1

Plus: Cost of goods manufactured
Cost of goods available for sale
Less: Finished goods inventory, June 30
Cost of goods sold

$
$3,890
3,390
2,712

$ 2,550
10,085
12,635
3,550
$ 9,085

570

9,992
10,562
477
$10,085

CASE 3-48
(a) Costs assigned to Jobs 101 & 111:
Job 101
Prior to July:
Direct materials
$ 9,000
Direct labour
2,000
Overhead applied 1
2,400
Added in July:
Direct materials
Direct labour
1,000
Overhead applied 1
1,200
$15,600
1
Direct labour cost 120%
(b)

(c)

Job 111
$ 600
100
120
500
3,000
3,600
$7,920

Direct Materials Inventory

Beg Bal
3,000 4,900 Used
Purchases 6,000
End Bal
4,100
Work in Process, ending
Job 103
Beginning balance
$ 5,800
Material added
3,600
Labour added
3,800
Overhead applied
4,560
$17,760
(1) Direct Material
Direct Labour
Overhead applied
(120% of direct labour cost)
Total

(1)
(2)
(3)
(4)

Job 115
$ 800
200
240
$1,240
$ 2,500
1,500
1,800
$ 5,800

Total
$ 5,800
4,400
4,000
4,800
$19,000

CASE 3-48 (Continued)

(2) Total material used
Less: Jobs 111 & 115
Material added to Job 103

$ 4,900
1,300
$ 3,600

(3) Total direct labour used

Less: Jobs 101, 111, & 115
Labour added to Job 103

$ 8,000
4,200
$ 3,800

(4) Overhead applied =

Direct labour cost 120%

(d)

Finished Goods Inventory

Beg Bal
18,000 18,000 Cost of Goods Sold
Completed* 23,520
End Bal
23,520
* Job 101, $15,600 + Job 111, $7,920