Calculate Cost of Goods Manufactured and prepare

QUESTION 1. Calculate Cost of Goods Manufactured and prepare a schedule to support your calculations based
upon the following information for Example Manufacturing, Inc. for January 2017. (See example of a
schedule above). Remember that not all of the below items appear on the Cost of Goods
Manufactured schedule.
Depreciation on salespersons' vehicles $ 2,000 Depreciation on factory equipment 10,000 Direct labor used 60,000 Direct materials used 55,000 Factory maintenance 6,500 Finished goods balance, January 1 29,000 Finished goods balance, January 31 32,000 Wages for factory janitor
President’s salary 3,500
12,500 Rent on the factory building 4,000 Sales commissions 9,500 Utilities for factory activities 3,900 Work in Process balance January 1 65,000 Work in Process balance January 31 67,500 Factory supervisor's salary for January 10,000 Salespersons' salaries for January 17,000 Advertising expense for January 3,000 Insurance expense for factory building for January 1,600 QUESTION 2.
GIVEN: Example Manufacturing Company uses a job order costing system. The following
information summarizes its operations related to production for January, its first month of operations. A. Purchased production materials on account, $93,000.
B. Production materials of $94,000 were requisitioned to the factory for the five jobs started in
January and for general factory use as follows:
Job Materials Job No. 1001 $16,000 Job No. 1002 15,000 Job No. 1003 11,800 Job No. 1004 20,200 Job No. 1005 22,000 General factory use 9,000
$94,000 C. Factory labor costs of $76,000 were incurred. The employee time tickets provided the following:
Job Factory Labor Job No. 1001 $ 11,000 Job No. 1002 12,750 Job No. 1003 11,250 Job No. 1004 14,800 Job No. 1005 18,200 General factory use 8,000
$76,000 D. Factory overhead is allocated to jobs at a rate of $60 per machine hour. Machine hours used
were: Job Machine Hours Job No. 1001
105
Job No. 1002 110 Job No. 1003 95 Job No. 1004 150 Job No. 1005 120
580 E. Depreciation on the factory machinery and equipment was $7,000.
F. Factory overhead costs incurred on account were $10,200.
G. Jobs 1001, 1002 and 1004 were completed.
H. Jobs 1001 and 1002 were shipped and the customers were billed $105,000 for job 1001 and
$115,000 for job 1002. REQUIRED:
Part 1: Prepare a schedule summarizing manufacturing costs by job incurred in January. Use the
following columns and provide column totals.
Job Direct Materials Direct Labor Factory Overhead Total Part 2: What are the January 31 balances for each of the following accounts? Support your
answers by indicating the jobs in that balance.
Work in Process Inventory
Finished Goods Inventory
Cost of Goods Sold
Part 3: What was cost of goods manufactured for January? (Show supporting work.)
Part 4: What was gross profit for January? (Show supporting work.)
Part 5: Prepare summary journal entries for information a through h given above. QUESTION 3.
GIVEN: The controller for Traditional Manufacturing Inc. performed a trend analysis of the unit
manufacturing costs of product T-2 for the month of March. Two patterns emerged; there was a
gradual upward trend in the unit costs over the month for T-2 and there was an upward spike in unit
costs on Fridays which did not carry over to Mondays. (The plant was closed on weekends.) REQUIRED:
Part 1: What are some possible explanations for the gradual increase in unit manufacturing costs
over the month? What information would you ask for to investigate the possible explanations?
Part 2: What are some possible explanations for the Friday upward spike in unit manufacturing
costs? What information would you ask for to investigate the possible explanations?
Part 3: If manufacturing overhead is allocated using an annually predetermined overhead rate, how
might a product have an increase in manufacturing overhead attached to it during a particular month
or day?