skip to Main Content
The smarter way
to do assignments.

Please note that this is just a preview of a school assignment posted on our website by one of our clients. If you need assistance with this question too, please click on the Order button at the bottom of the page to get started.

Accounting
DATA:  Targon, Inc., manufactures lawn equipment.  A job-order costing system is used, since the products are manufactured in batches rather than on a continuous basis.  The company started operations on January 1, 2014.  Operating activities during the first 11 months of the year (through November 30) resulted in the following balances in selected accounts:

                                                       RAW MATERIALS                      
RAW MATERIALS
 
                                                     Dr.                              Cr.                       

          Balance 11/30/2014      36,000                                                  

                                           MANUFACTURING OVERHEAD
MANUFACTURING OVERHEAD
                                                  Dr.                    Cr.

                                              2,260,000*

          Balance 12/31/2014         ?

   

                                                        WORK IN PROCESS                
WORK IN PROCESS
                
                                                             Dr.                        Cr.                   
               Balance 11/30/2014.       1,210,000                                     

                                                   COST OF GOODS SOLD
COST OF GOODS SOLD
                                                          Dr.                       Cr.

           Balance 11/30/2014       14,200,000

                                                     FINISHED GOODS
FINISHED GOODS
                                                    Dr.                               Cr.

      Balance 11/30/2014        2,785,000

*This figure represents actual manufacturing overhead costs incurred through November 30, 2014 (11 months).

The following additional information is available on the company:

The Work in Process inventory at November 30 consisted of two jobs:
The Work in Process inventory at November 30 consisted of two jobs:

                                                                                                                As of
      Job No.              Units               Items                                   November 30

1105 50000 Estate Sprinklers $  720,000 1106 40000 Economy Sprinklers     490,000      Total $1,210,000
1105 50000 Estate Sprinklers $  720,000 1106 40000 Economy Sprinklers     490,000      Total $1,210,000
1105 50000 Estate Sprinklers $  720,000
1105
1105
50000
50000
Estate Sprinklers
Estate Sprinklers
$  720,000
$  720,000
1106 40000 Economy Sprinklers     490,000
1106
1106
40000
40000
Economy Sprinklers
Economy Sprinklers
    490,000
    490,000
     Total $1,210,000

     Total
     Total
$1,210,000
$1,210,000

 
The Finished Goods Inventory at November 30 consisted of five separate items in stock:
The Finished Goods Inventory at November 30 consisted of five separate items in stock:

                 Items                   Quantity and Unit Cost                 Total Cost     

Estate Sprinklers 5,000 units at $22 each  $     110,000 Deluxe Sprinklers 115,000 units at $17 each      1,955,000 Brass Nozzles 10,000 units at $14 per unit         140,000 Rainmaker Nozzles   5,000 units at $16 per unit           80,000 Connectors 100,000 units at $5 per unit         500,000                        Total  $ 2,785,000
Estate Sprinklers 5,000 units at $22 each  $     110,000 Deluxe Sprinklers 115,000 units at $17 each      1,955,000 Brass Nozzles 10,000 units at $14 per unit         140,000 Rainmaker Nozzles   5,000 units at $16 per unit           80,000 Connectors 100,000 units at $5 per unit         500,000                        Total  $ 2,785,000
Estate Sprinklers 5,000 units at $22 each  $     110,000
Estate Sprinklers
Estate Sprinklers
5,000 units at $22 each
5,000 units at $22 each
 $     110,000
 $     110,000
Deluxe Sprinklers 115,000 units at $17 each      1,955,000
Deluxe Sprinklers
Deluxe Sprinklers
115,000 units at $17 each
115,000 units at $17 each
     1,955,000
     1,955,000
Brass Nozzles 10,000 units at $14 per unit         140,000
Brass Nozzles
Brass Nozzles
10,000 units at $14 per unit
10,000 units at $14 per unit
        140,000
        140,000
Rainmaker Nozzles   5,000 units at $16 per unit           80,000
Rainmaker Nozzles
Rainmaker Nozzles
  5,000 units at $16 per unit
  5,000 units at $16 per unit
          80,000
          80,000
Connectors 100,000 units at $5 per unit         500,000
Connectors
Connectors
100,000 units at $5 per unit
100,000 units at $5 per unit
        500,000
        500,000
                       Total  $ 2,785,000

                       Total
                       Total
 $ 2,785,000
 $ 2,785,000

    

Manufacturing overhead cost is assigned to jobs on a basis of direct labor-hours.  For 2014, management estimated that the company would work 400,000 direct labor-hours and incur $2,400,000 in manufacturing overhead cost.
Manufacturing overhead cost is assigned to jobs on a basis of direct labor-hours.  For 2014, management estimated that the company would work 400,000 direct labor-hours and incur $2,400,000 in manufacturing overhead cost.

A total of 376,000 direct labor-hours were worked during the first 11 months of the year (through November 30)
A total of 376,000 direct labor-hours were worked during the first 11 months of the year (through November 30)

Items (e) through (j) below summarize the activity that took place in the company during December 2014.

A total of $708,000 in raw materials was purchased during the month
A total of $708,000 in raw materials was purchased during the month

Raw materials were drawn from inventory and charged as follows:
Raw materials were drawn from inventory and charged as follows:

1105 See above         $ 210,000 1106 See above 6,000 1201 30,000 rainmaker nozzles            181,000 1202 10,000 deluxe sprinklers              92,000 1203 50,000 ring sprinklers            163,000 — Indirect Materials              30,000                  Total         $ 682,000
1105 See above         $ 210,000 1106 See above 6,000 1201 30,000 rainmaker nozzles            181,000 1202 10,000 deluxe sprinklers              92,000 1203 50,000 ring sprinklers            163,000 — Indirect Materials              30,000                  Total         $ 682,000
1105 See above         $ 210,000
1105
1105
See above
See above
        $ 210,000
        $ 210,000
1106 See above 6,000
1106
1106
See above
See above
6,000
6,000
1201 30,000 rainmaker nozzles            181,000
1201
1201
30,000 rainmaker nozzles
30,000 rainmaker nozzles
           181,000
           181,000
1202 10,000 deluxe sprinklers              92,000
1202
1202
10,000 deluxe sprinklers
10,000 deluxe sprinklers
             92,000
             92,000
1203 50,000 ring sprinklers            163,000
1203
1203
50,000 ring sprinklers
50,000 ring sprinklers
           163,000
           163,000
— Indirect Materials              30,000


Indirect Materials
Indirect Materials
             30,000
             30,000
                 Total         $ 682,000

                 Total
                 Total
        $ 682,000
        $ 682,000

      

The payroll during December was as follows:
The payroll during December was as follows:

                                  Hours      Total Cost
1105  6,000 $   62,000 1106  2,500      26,000 1201 18,000    182,000 1202      500        5,000 1203   5,000      52,000 Indirect labor   8,000      85,000 Sales and admin.    —–    122,000       Total $ 534,000
1105  6,000 $   62,000 1106  2,500      26,000 1201 18,000    182,000 1202      500        5,000 1203   5,000      52,000 Indirect labor   8,000      85,000 Sales and admin.    —–    122,000       Total $ 534,000
1105  6,000 $   62,000
1105
1105
 6,000
 6,000
$   62,000
$   62,000
1106  2,500      26,000
1106
1106
 2,500
 2,500
     26,000
     26,000
1201 18,000    182,000
1201
1201
18,000
18,000
   182,000
   182,000
1202      500        5,000
1202
1202
     500
     500
       5,000
       5,000
1203   5,000      52,000
1203
1203
  5,000
  5,000
     52,000
     52,000
Indirect labor   8,000      85,000
Indirect labor
Indirect labor
  8,000
  8,000
     85,000
     85,000
Sales and admin.    —–    122,000
Sales and admin.
Sales and admin.
   —–
   —–
   122,000
   122,000
      Total $ 534,000
      Total
      Total

$ 534,000
$ 534,000

 
Other costs incurred in the factory during December were:
Other costs incurred in the factory during December were:

Depreciation $ 62,500 Utilities    15,000 Insurance      1,000 Property Taxes     3,500 Maintenance     6,000       Total       $ 88,000
Depreciation $ 62,500 Utilities    15,000 Insurance      1,000 Property Taxes     3,500 Maintenance     6,000       Total       $ 88,000
Depreciation $ 62,500
Depreciation
Depreciation
$ 62,500
$ 62,500
Utilities    15,000
Utilities
Utilities
   15,000
   15,000
Insurance      1,000
Insurance
Insurance
     1,000
     1,000
Property Taxes     3,500
Property Taxes
Property Taxes
    3,500
    3,500
Maintenance     6,000
Maintenance
Maintenance
    6,000
    6,000

      Total       $ 88,000
      Total
      Total
      $ 88,000
      $ 88,000

          
Jobs completed during December and the number of units transferred to the finished goods warehouse were:
Jobs completed during December and the number of units transferred to the finished goods warehouse were:

         Job No.                Quantity                  Items

1105 50,000 units Estate Sprinklers 1106 40,000 units Economy Sprinklers 1201 30,000 units Rainmaker Nozzles 1203 50,000 units Ring Sprinklers
1105 50,000 units Estate Sprinklers 1106 40,000 units Economy Sprinklers 1201 30,000 units Rainmaker Nozzles 1203 50,000 units Ring Sprinklers
1105 50,000 units Estate Sprinklers
1105
1105
50,000 units
50,000 units
Estate Sprinklers
Estate Sprinklers
1106 40,000 units Economy Sprinklers
1106
1106
40,000 units
40,000 units
Economy Sprinklers
Economy Sprinklers
1201 30,000 units Rainmaker Nozzles
1201
1201
30,000 units
30,000 units
Rainmaker Nozzles
Rainmaker Nozzles
1203 50,000 units Ring Sprinklers
1203
1203
50,000 units
50,000 units
Ring Sprinklers
Ring Sprinklers

               
Finished products were sold and shipped to customers during December as follows:
Finished products were sold and shipped to customers during December as follows:

              Items                           Quantity

Estate Sprinklers 16,000 units Deluxe Sprinklers 32,000 units Economy Sprinklers 20,000 units Ring Sprinklers 22,000 units Brass Nozzles   5,000 units Rainmaker Nozzles 10,000 units Connectors 26,000 units
Estate Sprinklers 16,000 units Deluxe Sprinklers 32,000 units Economy Sprinklers 20,000 units Ring Sprinklers 22,000 units Brass Nozzles   5,000 units Rainmaker Nozzles 10,000 units Connectors 26,000 units
Estate Sprinklers 16,000 units
Estate Sprinklers
Estate Sprinklers
16,000 units
16,000 units
Deluxe Sprinklers 32,000 units
Deluxe Sprinklers
Deluxe Sprinklers
32,000 units
32,000 units
Economy Sprinklers 20,000 units
Economy Sprinklers
Economy Sprinklers
20,000 units
20,000 units
Ring Sprinklers 22,000 units
Ring Sprinklers
Ring Sprinklers
22,000 units
22,000 units
Brass Nozzles   5,000 units
Brass Nozzles
Brass Nozzles
  5,000 units
  5,000 units
Rainmaker Nozzles 10,000 units
Rainmaker Nozzles
Rainmaker Nozzles
10,000 units
10,000 units
Connectors 26,000 units
Connectors
Connectors
26,000 units
26,000 units

       

   

REQUIRED:

Determine the amount of under- or overapplied overhead for the year 2014 “and” the month of December  2014 . What is the appropriate accounting treatment for this under- or overapplied overhead balance? Explain your answer. Determine the dollar balance in the Work in Process Inventory account as of December 31, 2014. For each inventory item, determine the dollar balance in the Finished Goods Inventory account as of December 31, 2014.  Assume a LIFO (Last-In; First-Out) flow of units.

       Estate Sprinklers          __________

         Economy Sprinklers     __________

            Deluxe Sprinklers         __________

      Brass Nozzles               __________

   Rainmaker Nozzles       __________

       Connectors                    __________

         Ring Sprinklers             __________

Prepare an Income Statement for the month of December (2014). To calculate Sales Revenue assume that Targon, Inc. “marks up” its products at 30% above “adjusted” Cost of Goods Sold. Also, assume an income tax rate of 25%.

GET HELP WITH THIS ASSIGNMENT TODAY

Clicking on this button will take you to our custom assignment page. Here you can fill out all the additional details for this particular paper (grading rubric, academic style, number of sources etc), after which your paper will get assigned to a course-specific writer. If you have any issues/concerns, please don’t hesitate to contact our live support team or email us right away.

How It Works        |        About Us       |       Contact Us

© 2018 | Intelli Essays Homework Service®

Back To Top