Exercise E21-1 page 886. (a) Factory Labor 103,000 Factory Wages Payable 90,000 Employer Payroll Taxes Payable 9,000

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1 Exercise E21-1 page 886 (a) Factory Labor 103,000 Factory Wages Payable 90,000 Employer Payroll Taxes Payable 9,000 Employer Fringe Benefits Payable 4,000 (b) Work in Process Inventory 87,550 Manufacturing Overhead 15,450 Factory Labor 103,000 Weygandt, Kieso, Kimmel 6 th Edition page 1

2 (a) Exercise E21-2 page 886 5/31 Work in Process (Inventory) 8,900 Manufacturing Overhead 800 Raw Materials (Inventory) 9, Work in Process (Inventory) 13,000 Manufacturing Overhead 1,200 Factory Labor 14, Work in Process (Inventory) 10,400 Manufacturing Overhead 10,400 Job 429 Beg Bal Materials Labor Overhead Total 2,000 2,500 2,400 1,920 8, Finished Goods (Inventory) 8,820 Work in Process (Inv) 8,820 Weygandt, Kieso, Kimmel 6 th Edition page 2

3 Exercise E21-2 (continued) Work in Process (Inventory) Beg Bal 3,200 FG 8,820 DM 8,900 DL 13,000 MO 10,400 35,500 B = 26,680 Subsidary Ledger of Job Cost Sheets Job Beg Bal Materials Labor Overhead Total 430 1,200 2,000 3,000 2,400 8, ,400 7,600 6,080 18,080 26,680 Weygandt, Kieso, Kimmel 6 th Edition page 3

4 Exercise E21-5 page 887 (a) est. MO for year = MO rate est. activity for year $275,000 = $2.20 per hour 125,000 hrs. Make the entry to apply overhead to production for January. 31 Work in Process (Inventory) 26,400 Manufacturing Overhead 26,400 (b) Manufacturing Overhead Actual 26,000 Applied 26,400 1/31 Bal = 400 overapplied Bal Sheet as Unearned Revenue (c) Manufacturing Overhead Actual Jan 26,000 Applied 26,400 Feb - Dec 274,000 Applied 259,600 12/31 Bal = 14,000 underapplied (d) Cost of Goods Sold 14,000 Manufacturing Overhead 14,000 Weygandt, Kieso, Kimmel 6 th Edition page 4

5 Exercise E21-6 page 888 (a) (1) Source documents for Materials = materials requisition slips Labor = time tickets Overhead = predetermined rate (2) at beginning of year would be: est. MO for year = MO rate est. activity for year but after the fact M O = 572 and 494 and 702 = 130% D L Weygandt, Kieso, Kimmel 6 th Edition page 5

6 Exercise E21-6 (continued) (3) Date Materials Labor Overhead 7/ , , ,825 1,360 1,768 Total Cost = $7,953 Unit Cost = 7,953 = $3.98 2,000 (d) Finished Goods (Inventory) 7,953 Work in Process (Invntry) 7,953 Weygandt, Kieso, Kimmel 6 th Edition page 6

7 Exercise E21-7 page Raw Materials (Inventory) 46,300 Accounts Payable 46, Work in Process (Inventory) 27,200 Manufacturing Overhead 8,800 Raw Materials (Inventory) 36, Factory Labor 64,900 Employer Payroll Tax Pay 5,900 Wages Payable 59, Work in Process (Inventory) 60,000 Manufacturing Overhead 4,900 Factory Labor 64, Manufacturing Overhead 80,500 Accounts Payable 80,500 Weygandt, Kieso, Kimmel 6 th Edition page 7

8 Exercise E21-7 (continued) 6. Work in Process (Inventory) 90,000 Manufacturing Overhead 90, Finished Goods (Inventory) 88,000 Work in Process (Inventory) 88, Accounts Receivable 103,000 Sales 103,000 Cost of Goods Sold 68,000 Finished Goods (Inventory) 68,000 Determine the balance of Manufacturing Overhead and state whether it is under or overapplied. Manufacturing Overhead 2. IM 8, Applied 90, IL 4, O 80,500 Bal = 4,200 (under) Weygandt, Kieso, Kimmel 6 th Edition page 8

9 Exercise E21-8 page Raw Materials (Inventory) 172,000 Accounts Payable 172,000 Factory Labor 87,300 Wages Payable 87, Work in Process (Inventory) 150,530 Manufacturing Overhead 4,470 Raw Materials (Inventory) 155,000 Work in Process (Inventory) 84,000 Manufacturing Overhead 3,300 Factory Labor 87, Manufacturing Overhead 39,500 Accounts Payable 39,500 Weygandt, Kieso, Kimmel 6 th Edition page 9

10 Exercise E21-8 (continued) 4. Manufacturing Overhead 14,550 Accumulated Depreciation 14, Work in Process (Inventory) 63,000 Manufacturing Overhead 63,000 Job Materials Labor Overhead Total A20 32,240 18,000 13,500 63,740 A21 42,920 26,000 19,500 88,420 A23 39,270 25,000 18,750 83, , Finished Goods (Inventory) 235,180 Work in Process (Invntry) 235,180 Weygandt, Kieso, Kimmel 6 th Edition page 10

11 Brief Exercise BE21-2 page 886 Raw Materials (Inventory) 3,000 Accounts Payable 3,000 Factory Labor 4,000 Factory Wages Payable 3,600 Employer Payroll Tax Pay 400 Manufacturing Overhead 2,000 Utilities Payable 2,000 Brief Exercise BE21-3 page 886 Work in Process (Inventory) 2,300 Manufacturing Overhead 600 Raw Materials (Inventory) 2,900 Brief Exercise BE21-4 page 886 Work in Process (Inventory) 3,500 Manufacturing Overhead 500 Factory Labor 4,000 Weygandt, Kieso, Kimmel 6 th Edition page 11

12 Brief Exercise BE21-6 page 886 est. MO for year = MO rate est. activity for year Based on direct labor cost: $400,000 = 80% $500,000 Based on direct labor hours: $400,000 = $8 per hour 50,000 hrs. Based on machine hours: $400,000 = $4 per hour 100,000 hrs. The journal entry to apply overhead costs to production is: Work in Process (Inventory) Manufacturing Overhead est est Weygandt, Kieso, Kimmel 6 th Edition page 12

13 Brief Exercise BE21-7 page 886 1/31 Work in Process (Inventory) 32,000 Manufacturing Overhead 32,000 2/28 Work in Process (Inventory) 24,000 Manufacturing Overhead 24,000 3/31 Work in Process (Inventory) 40,000 Manufacturing Overhead 40,000 Brief Exercise BE21-8 page 886 3/31 Finished Goods (Inventory) 52,000 Work in Process (Inventory) 52, Cash 35,000 Sales 35, Cost of Goods Sold 20,000 Finished Goods (Inventory) 20,000 Weygandt, Kieso, Kimmel 6 th Edition page 13

14 Brief Exercise BE21-9 page 886 Wendy Company Debit balance = underapplied Interim Statements = Prepaid Expense on B.S. Annual Statements = not shown separately Mahmoud Company Credit balance = overapplied Interim Statements = Unearned Revenue on B.S. Annual Statements = not shown separately Brief Exercise BE21-10 page 886 Sanchez Company Cost of Goods Sold 1,000 Manufacturing Overhead 1,000 Gomez Company Manufacturing Overhead 900 Cost of Goods Sold 900 Weygandt, Kieso, Kimmel 6 th Edition page 14

15 Weygandt, Kieso, Kimmel 6 th Edition page 15

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