Solution Manual For Accounting: Tools for Business Decision Making, 8th Edition

CHAPTER 2 SOLUTIONS TO PROBLEMS: SET B PROBLEM 2-1B (a) $440,000 ÷ 20,000 direct labor hours = $22 per direct labor hour (b) See solution to part (e) for job cost sheets (c) Raw Materials Inventory …………………………………….. Accounts Payable ………………………………………. 45,000 Factory Labor ……………………………………………………. Employer Payroll Taxes Payable …………………. Factory Wages Payable ………………………………. 33,500 Manufacturing Overhead……………………………………. Accumulated Depreciation—Equipment ………. Accounts Payable ………………………………………. Raw Materials Inventory ……………………………… Factory Labor …………………………………………….. 42,500 (d) Work in Process Inventory…………………………………. Raw Materials Inventory ($5,000 + $17,000 + $13,000) …………………….. 35,000 Work in Process Inventory…………………………………. Factory Labor ($3,000 + $12,000 + $9,000) ……. 24,000 Work in Process Inventory…………………………………. Manufacturing Overhead (200 + 800 + 600) X $22 per hour ………………. 35,200 45,000 7,500 26,000 12,000 11,000 10,000 9,500 35,000 24,000 35,200 See solution to part (e) for postings to job cost sheets. Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) 2-1 PROBLEM 2-1B (Continued) (e) Job Cost Sheets Job No. 25 Date Direct Materials Beg. $10,000 Jan. 5,000 $15,000 Direct Labor $6,000 3,000 $9,000 Manufacturing Overhead *$ 9,000* * 4,400* *$13,400* Cost of completed job Direct materials…………………………………………………….. Direct labor ………………………………………………………….. Manufacturing overhead ……………………………………….. Total cost ……………………………………………………………………. $15,000 9,000 13,400 $37,400 *$22 X 200 direct labor hours Job No. 26 Date Direct Materials Jan. $17,000 $17,000 Direct Labor $12,000 $12,000 Manufacturing Overhead **$17,600** **$17,600** Cost of completed job Direct materials…………………………………………………….. Direct labor ………………………………………………………….. Manufacturing overhead ……………………………………….. Total cost ……………………………………………………………………. $17,000 12,000 17,600 $46,600 **$22 X 800 direct labor hours Job No. 27 Date Direct Materials Jan. Direct Labor Manufacturing Overhead $9,000 ***$13,200*** $13,000 ***$22 X 600 direct labor hours 2-2 Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) PROBLEM 2-1B (Continued) (f) Finished Goods Inventory………………………………. Work in Process Inventory ($37,400 + $46,600) ………………………………. 84,000 Accounts Receivable …………………………………….. Sales Revenue ($63,000 + $74,000) …………… 137,000 Cost of Goods Sold ……………………………………….. Finished Goods Inventory ($42,000 + $37,400) ………………………………. 79,400 (g) Beginning balance Direct materials Direct labor Manufacturing overhead Ending balance Work in Process 25,000 84,000 35,000 24,000 35,200 35,200 84,000 137,000 79,400 Cost of completed jobs 25 and 26 The balance in this account consists of the current costs assigned to Job No. 27: Direct Materials ………………………………………………………. Direct Labor ……………………………………………………………. Manufacturing Overhead …………………………………………. Total costs assigned ………………………………………… $13,000 9,000 13,200 $35,200 (h) Manufacturing Overhead Actual Applied 42,500 35,200 7,300 The balance in the Manufacturing Overhead account is underapplied. Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) 2-3 PROBLEM 2-2B (a) 1/1 12/31 Work in Process Inventory Balance (1) 111,000 Completed work (5) (c) Direct materials (2) 97,000 Direct labor (3) 144,000 Manufacturing overhead (4)180,000 Balance 188,000 344,000 (1) Job 7650 Job 7651 $ 63,000 48,000 $111,000 (3) Job 7650 Job 7651 Job 7652 $ 36,000 40,000 68,000 $144,000 (2) Job 7650 Job 7651 Job 7652 $ 32,000 30,000 35,000 $ 97,000 (4) Job 7650 Job 7651 Job 7652 $ 45,000 50,000 85,000 $180,000 (5) (a) Job 7650 Beginning balance …………………………………………. Direct materials ……………………………………………… Direct labor……………………………………………………. Manufacturing overhead ………………………………… (b) Job 7651 Beginning balance …………………………………………. Direct materials ……………………………………………… Direct labor……………………………………………………. Manufacturing overhead ………………………………… (c) Total cost of completed work Job 7650 ……………………………………………………….. Job 7651 ……………………………………………………….. $ 63,000 32,000 36,000 45,000 $176,000 $ 48,000 30,000 40,000 50,000 $168,000 $176,000 168,000 $344,000 2-4 Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) PROBLEM 2-2B (Continued) Work in process balance ……………………………………….. $188,000 Unfinished job No. 7652 …………………………………………. $188,000 (a) (a) Current year’s cost Direct materials……………………… Direct labor …………………………… Manufacturing overhead ………… $ 35,000 68,000 85,000 $188,000 (b) Actual overhead costs Incurred on account ………………………………………. Indirect materials …………………………………………… Indirect labor …………………………………………………. Depreciation ………………………………………………….. Applied overhead costs Job 7650………………………………………………………… Job 7651………………………………………………………… Job 7652………………………………………………………… Actual overhead …………………………………………………… Applied overhead …………………………………………………. Underapplied overhead …………………………………………. Cost of Goods Sold ………………………………………………. 2,500 Manufacturing Overhead ………………………………… (c) Sales revenue (given) ………………………………… Cost of goods sold Add: Job 7648 ………………………………………….. Job 7649 ………………………………………….. Job 7650 ………………………………………….. Add: Underapplied overhead …………………….. Gross profit ………………………………………………. $135,000 12,000 16,000 19,500 $182,500 $ 45,000 50,000 85,000 $180,000 $182,500 180,000 $ 2,500 2,500 $490,000 $ 93,000 62,000 176,000 331,000 2,500 333,500 $156,500 Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) 2-5 PROBLEM 2-3B (a) (i) Raw Materials Inventory ……………………………………. Accounts Payable ……………………………………… 4,000 4,000 Factory Labor …………………………………………………… Cash …………………………………………………………. 7,000 Manufacturing Overhead …………………………………… Cash …………………………………………………………. 1,400 (ii) Work in Process Inventory ………………………………… Manufacturing Overhead …………………………………… Raw Materials Inventory …………………………….. 5,300 1,500 Work in Process Inventory ………………………………… Manufacturing Overhead …………………………………… Factory Labor ……………………………………………. 5,000 2,000 Work in Process Inventory ($5,000 X .70) ………………………………………………… Manufacturing Overhead ……………………………. (iii) Finished Goods Inventory …………………………………. Work in Process Inventory …………………………. Job Direct Materials Direct Labor Manufacturing Overhead* Total Costs Stiner Alton Herman $3,000 2,600 3,200 $2,400 2,200 2,100 $1,680 1,540 1,470 $ 7,080 6,340 6,770 $20,190 7,000 1,400 6,800 7,000 3,500 3,500 20,190 20,190 *70% of direct labor amount Cash ………………………………………………………………… Sales Revenue (3 X $12,000) ………………………. 36,000 Cost of Goods Sold ………………………………………….. Finished Goods Inventory ………………………….. 20,190 36,000 20,190 2-6 Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) PROBLEM 2-3B (Continued) (b) 5/1 5/31 Work in Process Inventory Balance 12,200 5/31 Completed work Direct materials 5,300 Direct labor 5,000 Overhead applied 3,500 Balance 5,810 20,190 (c) Work in Process Inventory……………………………………………….. $5,810 Job: Smith (Direct materials $1,900 + Direct labor $2,300 + Manufacturing overhead $1,610) ………………………………. $5,810 (d) ROBERT PEREZ COMPANY Cost of Goods Manufactured Schedule For the Month Ended May 31, 2017 Work in process, May 1 ……………………………………. Direct materials used ………………………………………. Direct labor……………………………………………………… Manufacturing overhead applied ………………………. Total manufacturing costs ………………………… Total cost of work in process …………………………… Less: Work in process, May 31 ………………………… Cost of goods manufactured ……………………………. $12,200 $5,300 5,000 3,500 13,800 26,000 5,810 $20,190 Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) 2-7 PROBLEM 2-4B (a) Department A: Department B: Department C: $720,000 ÷ $600,000 = 120% of direct labor cost. $640,000 ÷ 40,000 = $16.00 per direct labor hour. $900,000 ÷ 150,000 = $6.00 per machine hour. (b) Manufacturing Costs Direct materials Direct labor Overhead applied Total A $ 92,000 48,000 57,600 * $197,600 Department B $ 86,000 35,000 56,000 ** $177,000 C $ 64,000 50,400 75,600 *** $190,000 A $60,000 57,600 $ 2,400 Department B $60,000 56,000 $ 4,000 C $72,100 75,600 $ (3,500) *$48,000 X 120% **3,500 X $16 ***12,600 X $6.00 (c) Manufacturing Overhead Incurred Applied Under (over) applied 2-8 Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) PROBLEM 2-5B (a) $88,900 ($80,000 + $8,900). (b) $20,500 [($19,000 + $90,400) – $88,900 (See (a))]. (c) $27,200 (Given in Other data—$19,000 + $8,200). (d) $90,000 ($117,000 manufacturing overhead applied ÷ 130%). (e) $117,000 (Manufacturing overhead applied). (f) [$27,200 + $80,000 + $90,000 + $117,000 – $5,450 (See (g))]. $308,750 (g) $5,450 [$2,000 + $1,500 + ($1,500 X 130%)]. (h) $145,000 (Given in Other data). (i) $308,750 (Same as (f)). (j) $315,750 [$145,000 + $308,750 – $138,000 (Given in Other data)]. (k) $138,000 (Given in Other data). (l) [$90,000 (See (d)) + $16,000]. $106,000 (m) $106,000 (Same as (l)). (n) $95,100 [$117,000 + $3,000 (Given in Other data) – $8,900 – $16,000]. Copyright © 2018 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 8/e, Problems: Set B Solutions (For Instructor Use Only) 2-9