1. On November 14th the Milling Department has accepted Job 11407A for 1000 pounds of Cereal Mix. The bill of materials (BOM) for the Cereal Mix is: Oaks - 525 pounds - $1.25 per pound Wheat - 450 pounds - $1.15 per pound Barley – 85 pounds - $1.45 per pound Malt – 65 pounds - $2.15 per pound Honey 25 quarts - $1.20 per quart Water 25 gallons - $0,45 per gallon Time: Miller 4 ½ hours - $22.75 per hour Loader 1 ½ hours - $11.50 per hour Manufacturing overhead is applied at $5.75 per pound completed, and $75 of materials are returned to Raw Material Inventory. The Recipe produced $1025 pounds of cereal mix. (a) Write the journal entry to “load” (furnish raw materials) to Job 111407A (b) Write the journal entry to provide labor to Job 111407A (c) Write the journal entry to return 50 pounds oats, 5 pounds of barley, and 5 quarts of honey back to raw materials inventory. (d) Write the journal entry to apply manufacturing overhead to Job 111407A. (e) Transfer Job 111407A to finished goods on November 14th
(a) Nov 14th WIP - Job 111407A 1,478.00
Raw Materials 1,478.00
(525*$1.25)+(450*$1.15)+(85*$1.45)+(65*$2.15)+(25*$1.20)+(25*$0.45)= $1,478
(b) Nov 14th WIP - Job 111407A 119.63
Wages Payable or Wages Expense 119.63
(4.5*$22.75)+(1.5*$11.50)= $119.63
(c) Nov 14th Raw Materials 75.75
WIP - Job 111407A 75.75
(50*$1.25)+(5*$1.45)+(5*$1.20)= $75.75
(d) Nov 14th WIP - Job 111407A 5,893.75
Mfg Overhead 5,893.75
(1,025*$5.75)=$5,893.75)
(e) Nov 14th Finished Goods 7,415.63
WIP - Job 111407A 7,415.63
$1,478.00 + $119.63 - $75.75 +$5,893.75 =$7,415.63
2. The Nite Lite Factory produces two products- small lamps and desk lamps. It has two separate departments- finishing and production. The overhead budget for the finishing department is $550000, using 500000 direct labor hours. The overhead budget for the production department is $400000 using 80000 direct labor hours If the budget estimates that a small lamp will require 2 hours of finishing and 1 hour of production, what is the total amount of factory overhead to be allocated to small lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours, if 75000 units are produced?
$540,000
3. Phelan Systems Corporation is estimating activity costs associated with producting disk drives tapes drives, and wire drives. The indirect labor can be traced for four separate activity pools. The budgeted activity cost and activity base information, along with the estimated activity-based information, is provided below. Procurement $36000 Number of purchased order Scheduling $240000 Number of production orders Material handling $48000 Number of moves Product development $72000 Number of engineering changes Production $1420000 Machine hours Disk Drives 4000(# of purchase orders) 300(# of production orders) 1400(# of moves) 10(# of engineering changes) 2000(machine hours) 2000(# of units) Tape drives 2000(# of purchase orders) 150(# of production orders) 600(# of moves) 5(# of engineering changes) 8000(machine hours) 4000(# of units) Wire drive 12000(# of purchase orders) 800(# of production orders) 4000(# of moves) 25(# of engineering changes) 10000(machine hours) 2500(# of units) Determine the activity rate for the procurement per purchase order. a. $192 b. $20 c. $80 d. $71