Sie sind auf Seite 1von 10

Mini-Practice Set One - Instructions

Job Order Cost Accounting

You have learned how to account for the basic elements of manufacturing costs. This practice set
combines these various techniques and principles in a practical application for Storage Solutions, Inc.
You will be required to perform the duties not only of the cost accountant but also of the storeroom
clerk, voucher clerk, and other factory personnel.

Storage Solutions, Inc.


Storage Solutions, Inc. is a manufacturer of modular storage and media units for the home and office.
The components manufactured by the company include bookcases, entertainment centers, and shelving
units. These products are popular because of their trendy design features and ability to be arranged in
multiple configurations. Production is divided between custom orders and standard models
manufactured for stock.

The Production Division consists of three producing departments and two service departments. The
producing departments are Shaping, Assembly, and Finishing. The service departments are Building
Services and General Factory. The production process begins in the Shaping Department, where wood,
glass, and plastic are shaped into the component parts that make up the finished units. These parts are
transferred to the Assembly Department where they are assembled. In the Finishing Department, a
variety of finishes are applied and hardware is attached to the assembled units. The Building Services
and General Factory departments perform activities similar to those described for Grand Slam Uniforms
in the textbook. Finished products are sold to home furnishing stores across the country.

Cost Accounting System


Storage Solutions’ cost accounting system includes a number of journals, ledgers, and cost accounting
forms. All forms are provided. Entries have been made on these forms where indicated.

Journals
The seven journals used for making original entries are listed here, as are the initials to be used for
posting references.

Voucher Register VR
Materials Requisition Journal MR
Returned Materials Journal RM
Manufacturing Overhead Applied Journal MOA
Completed Jobs Journal CJ
Sales Journal S
General Journal (vouchers) J
General Ledger
The firm’s chart of accounts includes the following accounts, relating to the flow of manufacturing costs.
The balances as of June 1, 2006 are given and have been recorded for you in the general ledger
accounts.

121 Raw Materials $50,784.00


122 Work in Process 13,728.73
126 Finished Goods 28,648.70
401 Sales 0
415 Cost of Goods Sold 0
500 Factory Payroll Clearing 20,480.00
501 Manufacturing Overhead Control 0
502 MOH – Shaping Department 0
503 MOH – Assembly Department 0
504 MOH – Finishing Department 0
505 MOH – Building Services Department 0
506 MOH – General Factory Department 0
507 Overapplied or Underapplied MOH (Dr.) 5,194.00

Subsidiary Ledgers
Four subsidiary cost ledgers are used, and the necessary forms are provided for you. Storage Solutions
uses the FIFO method of costing all inventories.

Materials Ledger
In order to simplify the work in this project, the materials ledger, which actually contains several dozen
materials ledger cards, has been condensed to four cards showing the activities up to the close of
business on June 25. You will make detailed entries for Materials S-16 (shelves, 52” x 13”), T-23
(tempered glass panels), and P-42 (polishing cloths). All other materials are summarized in total on the
fourth materials ledger card, and no entries are required on it.

Job Cost Ledger


The job cost ledger currently consists of four job cost sheets. Job 211 was begun in May; Jobs 218, 219,
and 220 were started in June. Various entries have been posted through June 25.

Departmental Overhead Analysis Sheets


Overhead analysis sheet are provided for each of the five departments in the organization: Shaping,
Assembly, Finishing, Building Services, and General Factory. The first entry on each sheet summarizes
the postings of June 1 through June 25.

Finished Goods Ledger


The finished goods ledger consists of three stock cards showing all postings through June 25. You will
make entries involving two types of finished goods – bookcases (Stock 129) and shelving units (Stock
458) – as required during the remainder of the month. All other types of finished goods are summarized
on the third card, and no entries are required on it.
TRANSACTIONS
Record the following daily transactions in the proper journals. Post to the subsidiary ledgers daily.

June 26
Materials Issued
Requisition 613 for 50 units of Material T-23 for Job 211. Requisition 614 for 120 units of Material S-16
for Job 218.

When you record a requisition for direct materials, you will perform the duties of both the storeroom
clerk and the cost clerk (see Chapter 3). The following recording steps are required:
1) Compute the cost and enter the requisition on the materials ledger card.
2) Record the appropriate entries in the materials requisition journal.
3) Post to the job cost sheet.

June 27
Materials Received
300 units at $15.95 each of Material S-16, obtained on Purchase Order 2194, from the Glenshaw
Fabricating Company, Voucher 6-72.

When you record the receipts of materials, you will perform the work normally assigned to the
storeroom clerk and the voucher clerk (see Chapter 2). The following recording steps are required:
1) Record the receipt on the materials ledger card.
2) Enter the voucher in the voucher register.

Materials Issued
Requisition 615 for 14 units of Material T-23 for Job 220.

June 28
Materials Issued
Requisition 616 for 190 units of Material S-16 for Job 219. Requisition 617 for 110 units of Material P-42
for the Assembly Department.

Remember that issues of indirect materials require a different recording procedure (see Chapter 3):
1) Enter the issue on the materials ledger card.
2) Record the issue in the materials requisition journal.
3) Post to the departmental overhead analysis sheet.

Sale of Finished Goods


Sold 50 bookcases (Stock 129) to the Hornes Department Store for $160.50 each on Invoice 716; terms
2/10, n/30.

For sales, the following recording steps are required (see Chapter 10):
1) Enter the issue on the finished goods stock ledger card.
2) Record the sale in the sales journal.
June 29
Materials Issued
Requisition 618 for 490 units of Material T-23 for Job 219. Requisition 619 for 130 units of Material P-42
for the Finishing Department.

Materials Received
1,000 units at $2.25 each of Material T-23, obtained on Purchase Order 2195, from the Ambridge Glass
Company, Voucher 6-73.

Services Received
Repairs to equipment in the Shaping Department performed by South Side Repair for $310, Voucher 6-
74.

For transactions of this type, the following recording steps are required (see Chapter 7):
1) Enter the voucher in the voucher register.
2) Post to the departmental overhead analysis sheet.

Sale of Finished Goods


Sold 120 shelving units (Stock 458) to Room Concepts for $32 each on Invoice 717; terms 2/10, n/30.

June 30
Materials Issued
Requisition 620 for 350 units of Material T-23 for Job 218. Requisition 621 for 210 units of Material P-42
for the Finishing Department.

Materials Returned to Storeroom


25 units of Material T-23, originally issued on June 26, Requisition 613, for Job 211. Returned Materials
report 70 has been prepared.

Complete the entries normally made by the storeroom clerk and the cost clerk (see Chapter 3). The
following recording steps are required:
1) Determine the cost and make the entry (in parentheses) in the Issued section of the materials
ledger card.
2) Post to the job cost sheet.
3) Record the return in the returned materials journal.

Sale of Finished Goods


Sold 55 shelving units (Stock 458) to the Innovative Design Company for $32 each on Invoice 718; terms
2/10, n/30.

Services Received
Utilities for factory operations in June, payable to Edison Utilities, Voucher 6-75. The cost of $3,062
should be allocated as follows to the departments:
Shaping $902.00
Assembly 390.00
Finishing 290.00
Building Services 903.00
General Factory 577.00
INTERIM PROCEDURES
Complete the necessary recording and posting relating to the weekly and semimonthly payrolls.

Weekly Payroll Register


The weekly payroll register for June 24 through June 30 shows the following:
Gross earnings $26,490.00
Social Security taxes withheld 1,642.38
Medicare taxes withheld 397.36
Income taxes withheld 4,529.86
Group insurance withheld 364.66

Record the payroll using a general journal voucher (6-1), since the factory payroll register is not
provided. Then post the gross earnings to the Factory Payroll Clearing account. Other items are not
posted because no accounts are provided for them.

Analysis of Time Tickets


All analysis of the time tickets for the week ended June 30 is shown below. The following recording steps
are required:
1) Post direct labor to the job cost sheets.
2) Post indirect labor to the departmental overhead analysis sheets.

STORAGE SOLUTIONS, INC.


Analysis of Time Tickets
Week Ended June 30, 2006

DIRECT LABOR
SHAPING ASSEMBLY FINISHING
JOB HOURS AMOUNT HOURS AMOUNT HOURS AMOUNT TOTAL
211 185 $1,526.80 110 $1,248.00 $2,774.80
218 113 $958.00 133 1,103.90 148 1,702.00 3,763.90
219 235 2,021.00 356 2,954.80 240 2,760.00 7,735.80
220 285 2,451.00 165 1,369.50 0 0.00 3,820.50
Total: 633 $5,430.00 839 $6,955.00 498 $5,710.00 $18,095.00

INDIRECT LABOR
REGULAR OVERTIME
DEPARTMENT EARNINGS PREMIUM TOTAL
Shaping $900.00 $529.00 $1,429.00
Assembly 1,530.00 0.00 1,530.00
Finishing 833.00 426.00 1,259.00
Building Services 1,842.00 0.00 1,842.00
General Factory 2,335.00 0.00 2,335.00
Total: $7,440.00 $955.00 $8,395.00
Semimonthly Payroll Register
The semimonthly payroll register for June 16 through June 30 shows the following:
Gross earnings $6,056.00
Social Security taxes withheld 375.48
Medicare taxes withheld 151.40
Income taxes withheld 1,217.25
Group insurance withheld 160.56

Enter as you did the weekly payroll, using a general journal voucher (6-2).

Analysis of Semimonthly Payroll


An analysis of the semimonthly payroll for June 16 through June 30 shows the following charges to be
posted to the respective departmental overhead analysis sheets:
Building Services $1,756.00
General Factory 4,300.00
Total: $6,056.00

END-OF-MONTH PROCEDURES
The end-of-month procedures for Storage Solutions will be completed in the order in which you studied
the cost accounting elements: materials, labor, and manufacturing overhead.

Materials
Total the following journals and post to the appropriate general ledger accounts:
1) Voucher register
2) Materials requisition journal
3) Returned materials journal

Labor
A summary of factory wages for the month must be completed before labor costs can be charged to
production.
1) Enter the weekly payroll figures for the week ended June 30 (see above) and the semimonthly
payroll for the period ended June 30 in the partially completed monthly summary provided.
2) Total the summary and compute the total direct labor and indirect labor.
3) Prepare a general journal voucher (6-3) to transfer the cost of labor used during the month from
Factory Payroll Clearing 500 to Work in Process 122 (direct labor) and to Manufacturing
Overhead Control 501 (indirect labor).
4) Post to the general ledger accounts supplied.

Next, the employer’s payroll taxes for the month must be entered in the accounting records. The
summary of taxable factory wages for June is on the following page. (Note: SUTA is used for state
unemployment insurance tax.)
STORAGE SOLUTIONS, INC.
Summary of Taxable Factory Wages
June 2006
WAGES SUBJECT TO:
DEPARTMENT SOCIAL SECURITY TAX MEDICARE TAX FUTA AND SUTA TAXES
Shaping $30,085.00 $30,085.00 $4,330.60
Assembly 35,774.00 35,774.00 4,650.60
Finishing 30,397.00 30,397.00 2,929.60
Building Services 11,231.00 11,231.00 1,295.60
General Factory 18,003.00 18,003.00 1,590.60
Total: $125,490.00 $125,490.00 $14,797.00

1) Prepare a summary of payroll taxes for June similar to the one shown on page 135 of the
textbook. Use the following rates: Social Security (6.2%), Medicare (1.5%), FUTA (0.8%), and
SUTA (3.8%).
2) Post from the schedule to the departmental overhead analysis sheets.
3) Prepare a journal voucher (6-4) to record the payroll taxes.
4) Post to the general ledger account Manufacturing Overhead Control 501.

Manufacturing Overhead
Overhead costs include both fixed and variable elements. Use the schedule of monthly fixed overhead
charges for Storage Solutions (see below) as a basis for the following steps:
1) Prepare a general journal voucher (6-5) to record the fixed overhead costs.
2) Post to the Manufacturing Overhead Control account.
3) Post to the departmental overhead analysis sheets.

STORAGE SOLUTIONS, INC.


Schedule of Monthly Fixed Overhead Charges
Year 2006
DEPRECIATION
MACHINERY DEPRECIATION PROPERTY PROPERTY
DEPARTMENT AND EQUIP. BUILDINGS TAXES INSURANCE TOTAL
Shaping $1,159.00 $0.00 $82.00 $49.00 $1,290.00
Assembly 235.00 0.00 58.00 12.00 305.00
Finishing 622.00 0.00 72.00 22.00 716.00
Building Services 286.00 1,525.00 277.00 47.00 2,135.00
General Factory 888.00 0.00 145.00 65.00 1,098.00
Total: $3,190.00 $1,525.00 $634.00 $195.00 $5,544.00
Workers’ compensation insurance is estimated as follows for the departments:
Shaping $324
Assembly 360
Finishing 194
Building Services 48
General Factory 106

To enter these costs, perform the following steps:


1) Prepare a general journal voucher (6-6) to record workers’ compensation insurance. Credit
Workers’ Compensation Insurance Payable 218.
2) Post to the Manufacturing Overhead Control account.
3) Post to the departmental overhead analysis sheets.

Applying Overhead to Completed Goods


Overhead costs are ordinarily applied to finished goods as soon as possible after the factory operations
are completed. Jobs 218 and 219 were completed on June 30. Perform the following procedures for
each job:
1) Compute and enter the applied overhead on the job cost sheets. The following overhead rates
are to be used:
Shaping $8.50 per direct labor hour
Assembly $7.80 per direct labor hour
Finishing $8.40 per direct labor hour
2) Record the amount of overhead applied in the manufacturing overhead applied journal.
3) Total all columns of the job cost sheets and complete the summary block on the job cost sheets.

Applying Overhead to Work in Process


Jobs 211 and 220 are incomplete at the end of June. Use the following procedures to apply overhead to
these jobs:
1) Compute and enter the overhead to be applied for the month on the job cost sheets. Use the
overhead rates given above for Jobs 218 and 219.
2) Record the amount of overhead applied in the manufacturing overhead applied journal.
3) Foot the columns of the job cost sheets.

Summary of Manufacturing Overhead Costs


Manufacturing overhead costs are drawn together by completing a monthly summary, as follows:
1) Total the departmental overhead analysis sheets.
2) Prepare a schedule of departmental overhead costs similar to the one shown on page 153 of the
textbook.
3) Prepare a general journal voucher (6-7) to close Manufacturing Overhead Control 501 into the
departmental manufacturing overhead accounts.
4) Post to the general ledger accounts involved.

Allocating Service Department Costs


The allocation of service departments to the producing departments is made easier by the preparation
of a worksheet similar to the one shown on page 156 of the textbook. Building Services Department
costs are to be allocated on the basis of floor space occupied, as indicated on the next page.
Department Square Feet Percent
General Factory 21,840 28
Shaping 23,400 30
Assembly 11,700 15
Finishing 21,060 27
Total: 78,000 100
General Factory Department costs are to be allocated on the basis of direct labor costs shown by the
factory wage summary for June that you have already prepared.
1) Complete the allocation worksheet.
2) Prepare general journal vouchers (6-8 and 6-9) to apportion the service department costs to the
producing departments.
3) Post to the general ledger accounts.

Overapplied and Underapplied Overhead


Since the month’s activities are complete, total the manufacturing overhead applied journal to prepare
the way for the following steps:
1) Post the totals to the Work in Process account and to the appropriate departmental overhead
accounts in the general ledger.
2) Close the balances of the departmental overhead accounts into Overapplied or Underapplied
Manufacturing Overhead 507 by doing the following:
a. Prepare a general journal voucher (6-10).
b. Post the entry to the general ledger accounts involved. (The balance of Account 507 is
continued from month to month.)

Completion of Jobs
Jobs 218 and 219 were completed during the period and all costs have been totaled and summarized on
the job cost sheets. Therefore, the following steps are to be performed:
1) Record completion of the two jobs in the completed jobs journal.
2) Total the completed jobs journal and post.
3) Since Job 218 was for stock, record the receipt of 100 chairs (Stock 129) on the finished goods
stock ledger card.

Sale of Finished Goods


Job 219 was manufactured for Quality Home Interiors Company and is shipped immediately upon
completion on June 30. The sale, amounting to $47,300, is covered by Invoice 719; terms 2/10, n/30.
1) Enter the sale in the sales journal.
2) Since this is the final sale of the month, total the sales journal.
3) Post to the accounts supplied.

Schedules
Schedules are prepared to prove the balances of the subsidiary ledgers to their control accounts in the
general ledger before any financial statements are prepared.
1) Prepare a schedule of raw materials. Compare the total with the balance of Raw Materials 121.
2) Prepare a schedule of work in process. Compare the total with the balance of Work in Process
122.
3) Prepare a schedule of finished goods. Compare the total with the balance of Finished Goods
126.
Statements
The final cost data are now ready for inclusion in the monthly financial statements. Assume selling
expenses of $17,768.00 and general expenses of $10,104.00, estimate federal income tax at 15% of net
income for the period, and complete the following statements.
1) Schedule of manufacturing overhead for June.
2) Statement of cost of goods manufactured for June.
3) Income statement covering June operations.