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Chapter 2 - Asgmt-1

This document contains two accounting problems involving journal entries and the calculation of manufacturing costs. The first problem provides transactions for Dimasi Industries in January 2010 and asks the student to prepare journal entries using a single overhead account and calculate the manufacturing overhead in Work in Process Inventory. The second problem provides account balances and transactions for Sietens Corporation in August 2010 and asks the student to calculate the cost of goods manufactured, period costs, and cost of goods sold for that period.

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MarkJoven Bergantin
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639 views2 pages

Chapter 2 - Asgmt-1

This document contains two accounting problems involving journal entries and the calculation of manufacturing costs. The first problem provides transactions for Dimasi Industries in January 2010 and asks the student to prepare journal entries using a single overhead account and calculate the manufacturing overhead in Work in Process Inventory. The second problem provides account balances and transactions for Sietens Corporation in August 2010 and asks the student to calculate the cost of goods manufactured, period costs, and cost of goods sold for that period.

Uploaded by

MarkJoven Bergantin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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44. LO.

5 (Journal entries)

The following transactions were incurred by Dimasi Industries during January 2010:

1. Issued $800,000 of direct material to production.


2. Paid 40,000 hours of direct labor at $18 per hour.
3. Accrued 15,500 hours of indirect labor cost at $15 per hour.
4. Recorded $102,100 of depreciation on factory assets.
5. Accrued $32,800 of supervisors’ salaries.
6. Issued $25,400 of indirect material to production.
7. Completed goods costing $1,749,300 and transferred them to finished goods.

a. Prepare journal entries for these transactions using a single overhead account for both variable
and fi xed overhead. Th e Raw Material Inventory account contains
only direct material; indirect material costs are recorded in Supplies Inventory.

b. If Work in Process Inventory had a beginning balance of $18,900 and an ending


balance of $59,600, what amount of manufacturing overhead was included in Work
in Process Inventory during January 2010?

53. LO.3 & LO.7 (Product and period costs; CGM; CGS)
On August 1, 2010, Sietens Corporation had the following account balances:

Raw Material Inventory (both direct and indirect) $ 72,000


Work in Process Inventory 108,000
Finished Goods Inventory 24,000

During August, the following transactions took place.


1. Raw material was purchased on account, $570,000.
2. Direct material ($121,200) and indirect material ($15,000) were issued to production.
3. Factory payroll consisted of $180,000 for direct labor employees and $42,000 for indirect
labor employees.
4. Office salaries totaled $144,600 for the month.
5. Utilities of $40,200 were accrued; 70 percent of the utilities cost is for the factory.
6. Depreciation of $60,000 was recorded on plant assets; 80 percent of the depreciation
is related to factory machinery and equipment.
7. Rent of $66,000 was paid on the building. Th e factory occupies 60 percent of the building.
8. At the end of August, the Work in Process Inventory balance was $49,800.
9. At the end of August, the balance in Finished Goods Inventory was $53,400.
Sietens Corporation uses an actual cost system and debits actual overhead costs incurred
to Work in Process Inventory.
a. Determine the total amount of product cost (cost of goods manufactured) and
period cost incurred during August 2010.
b. Compute the cost of goods sold for August 2010.

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