Solutions

Project 3 Introduction

Project 3	Please use this template provided to solve project 3 that contains 2 parts. Save your file using your first initial, last name, and project 3.
Name: TYPE in your name here	Upload your solution to the project 3 link. Make sure you type your name in cell A2
You should always verify that your project file has been uploaded correctly. Remember it is your
responsibility to take the time to verify that your file has uploaded correctly.  If there are problems, please contact me immediately.
You will be graded on the accuracy of your answer and the usage of Excel in part 1 and your research and analysis skills for Part 2.
The project solution is worth a total of 30 pts. Each part is worth 15 pts. each.
Remember to review the eLectures and guided examples in MBC. Also, there is support material on job costing in the Module 18 folder.
Project 3 Part 1: Product costing in a job cost environment
1. Analyze and develop job cost information.
2. Develop a Schedule of Cost of goods manufactured and an Income Statement.
3. Develop a chart.
Project 3 Part 2: Objectives of SEC Research Analysis
1. Classify companies into service, merchandising, or manufacturing industry using the 10-K in the SEC EDGAR system.
2. Analyze the annual financial statements to differentiate among the three different industries.
3. Identify differences in inventory accounts among industries.
4. Explain how inventory impacts the performance of a company through revenue generation.
Grading Rubric for Project 3-Part 1: Worth 15 pts.	Points
Part 1:
#1	2
#2	2
#3	2
#4	1
#5	2
#6	2
#7	2
#8	2
Total Points Part 1	15
Grading Rubric for Project 3-Part 2: Worth 15 pts.	Points
Part 2: Make sure you are meeting all the requirements as set out on the Part 2 Instructions worksheet.
You will earn zero credit for Part 2, if you did not use the most current 10-K from the SEC EDGAR system.
#1 -1/2 pt. for each URL, CIK, and period of report date.	4.5
#2-1 pt. each	3	You must also include page references.
#3-1 pt. each	3	You must also include page references.
#4-1 pt. each	3	You must also include page references.
#5	1.5
Total Points Part 2	15
*** I will deduct .25 pts. For each spelling and grammar error.
***If a company's financial statements are in millions or thousands, please make sure you provide this information in your analysis.
If you do not provide this information for a company that reports in millions or thousands of dollars, I will deduct 1 pt. for each company you did not provide this information for.
Please realize how important this information is to a reader, since there is a big difference between giving inventory amount of $123 and $123,000,000.

Part 1 InstructionsAndSolution

Part 1: Information to use in completing is below and the requirements follow where you will answer the questions.
Grass Mower Company manufacturers a variety of gasoline-powered mowers for discount hardware and department stores.
The company uses a job cost system and treats each customer's order as a separate job.
The primary mower components (motors, chassis, and wheels) are purchased from three different suppliers under long-term
contracts that call for the direct delivery of raw materials to the production floor as needed. When a customer's order is
received, a raw materials purchase order is electronically placed with suppliers. The purchase order specifies the scheduled
date that production is to begin as the delivery date for motors and chassis, the scheduled date production is to be completed
is specified as the delivery date for the wheels. As a consequence, there are no raw materials inventories; raw materials are charged directly
to Work-in-process upon receipt. Upon completion goods are shipped directly to customers rather than transferred to finished goods inventory.
At the beginning of September the company had the following jobs in work-in-process inventories:
Job 1	$19,000
Job 2	15,000
Job 3	16,000
Total	$50,000
During September, the following activities took place:
1. Started jobs 4, 5,6, and 7.
2. Ordered and received the following raw materials for specified jobs:
Motors	Chassis	Wheels	Total
Job 2	0	0	$700	$700
Job 3	0	0	1,100	1,100
Job 4	1,500	2,000	1,600	5,100
Job 5	1,000	4,000	1,000	6,000
Job 6	8,000	3,500	900	12,400
Job 7	7,500	3,800	0	11,300
Total	$36,600
3. Incurred September manufacturing payroll:
Direct Labor
Job 1	$500
Job 2	3,100
Job 3	3,000
Job 4	4,000
Job 5	1,500
Job 6	2,500
Job 7	2,000
Total Direct Labor	16,600
Indirect Labor	4,000
4. Incurred additional manufacturing overhead costs for September:
Manufacturing supplies purchased and used	2,000
Depreciation on factory fixed assets	6,000
Factory utilities	4,900
5. Applied manufacturing overhead using a predetermined rate based on predicted annual overhead
and predicted annual direct labor cost as follows:
Predicted Annual Overhead	$185,250
Predicted Annual Direct Labor cost	$195,000
6. Completed and shipped jobs 1 and 6. The following is what was charged to these customers:
Job 1	28,000
Job 6	26,000
Total	54,000
7. Selling and Administrative costs incurred in September are the following:	$3,900
Required:	You need to use cell references to provide answers and calculations.
1. Develop the predetermined overhead rate.	0.95
2. Complete the job cost sheets provided below:
Job 1	Job 2	Job 3	Job 4	Job 5	Job 6	Job 7
Beginning Balance	$19,000	15,000	16,000
Current costs:
Direct materials	$700	1,100	5,100	6,000	12,400	11,300
Direct Labor	$500	3,100	3,000	4,000	1,500	2,500	2,000
Applied overhead	$475.00	$2,945.00	$2,850.00	$3,800.00	$1,425.00	$2,375.00	$1,900.00
Total	$19,975	$21,745	$22,950	$12,900	$8,925	$17,275	$15,200
3. Determine the ending Work-In-Process Inventory at the end of September and provide the number of the Jobs still in Work-in-Process at the end of September.
Job 2	$21,745
Job 3	$22,950
Job 4	$12,900
Job 5	$8,925
Job 7	$15,200
$81,720
4. Determine the Cost of Goods Sold for September and provide the number of the Jobs in Cost of Goods Sold for September.
Job 1	$19,975
Job 6	$17,275
$37,250
5. Prepare a statement of cost of goods manufactured for September below. Use Manufacturing Overhead applied in your statement.
Grass Mower Company
Statement of Cost of Goods Manufactured
For Month ending September 30, 2019
Current manufacturing costs:
Cost of material placed in production	$36,600
Direct Labor	16,600
Manufacturing overhead Applied	15770	$68,970
Work-in-process September 1, 2019	$50,000
Total costs in process	$118,970
Work-in-process September 30, 2019	($81,720)
Cost of goods manufactured	$37,250
6. Prepare an Income Statement for September below. The company does not close the over or underapplied overhead until the end of the year, so no adjustment is needed to Cost of Goods Sold.
Grass Mower Company
Income Statement
For Month ending September 30, 2019
Sales	54,000
Cost of goods sold	$37,250
Gross Profit	$16,750.00
Selling and Administrative expenses	($3,900)
Net income	$12,850.00
7. Determine the underapplied or overapplied manufacturing for September.
Indirect Labor	4,000
Manufacturing supplies purchased and used	$2,000
Depreciation on factory fixed assets	6,000
Factory utilities	4,900	Applied	Underapplied since applied is more than actual
Total Actual	16,900	15770	1,130
8. Prepare a pie chart below showing the balance of the jobs that are in work-in-process at the end of September.

Job 2 Job 3 Job 4 Job 5 Job 7 21745 22950 12900 8925 15200

Part 2 Instructions

Project 3 Part 2: SEC EDGAR Research Analysis Please answer the requirements in the order they are listed below by pasting your response into the Text box on the Part 2 Response Worksheet. Your analysis should be single spaced and doubled space between each requirement. I want you to use the 10-K file and not the interactive version of the 10-K to answer the requirements. Your submission should be at least 2 pages long if you were submitting it in a Word document. I would suggest you review the additional resources I have listed after the requirements below. If you have questions do not hesitate to ask a question. Requirements: 1. Find 3 different publicly traded companies’ most recent 10-K report from the SEC EDGAR system other than Caterpillar, Inc., Wal-Mart Stores, Inc., and Southwest Airlines Company to demonstrate an example of each of the following types of companies: manufacturer-Caterpillar, Inc., merchandiser-Wal-Mart Stores, Inc., and a service -SouthWest Airlines . The company must be an actively traded company at the present time, so if you are finding only old 10-Ks you might be looking at a company that went bankrupt, merged, or went private. Therefore, the companies you pick must be current publicly traded companies and cannot be companies that have gone private or bankrupt. Provide the URL address of each of the most current 10-K reports at the SEC EDGAR website, the CIK (Central Index Key) number for each of the companies, and the respective period of report date for each of the 10-K reports (I do not want the filing date, but the reporting date which is found on the first page of the 10-K). Read over the Quick EDGAR Tutorial under the heading Filings & Forms (EDGAR), so you have an understanding of how to use the EDGAR system if you have not used it before. http://www.sec.gov/edgar.shtml The 10-K reports can be found at the SEC website at Search for Company Filings, Click on Company or fund name, ticker symbol, CIK (Central Index Key), file number, state, country, or SIC (Standard Industrial Classification), Enter the company name or ticker symbol, Search for 10-K, and you pick the most recently filed 10-K report. 2. Explain why you have made the classifications for each of the 3 companies you identified in #1. Using the 10-K report, provide supporting information from the report that substantiates your classification of manufacturer, merchandiser, or a service company. Give the page numbers of the 10-K report you used to make the determination of which classification you used. 3. Compare, contrast, and explain the most recent audited income statements and explain the differences you found on the income statement in respect to how the companies report the cost of providing the product or service they sell. Explain how these costs are used to generate revenue for each of the companies. Give Dollar amounts for the costs the company is incurring to provide the product or service they sell. Give the page number of each of the income statements and be specific in your comparison by giving a description of the cost of the product or service and the dollar amounts that are being used on each of the income statements for these different costs. Make sure you are giving a detailed explanation. Additional guidance: The income statement and the statement of operations are the same thing.  This is just a variation of the common term "income statement", so if your company has a statement of operations this is the income statement.  You will see the word consolidated in most company's 10-K, which means that the company has controlling interest of other companies and has combined or "consolidated" all of these subsidiaries into the financial statement. Make sure you are using the audited financial statements and not just excerpts found in the annual report. 4. Compare, contrast, and explain the most recent audited balance sheets, notes to the financial statements, and identify what type of inventory accounts each of the companies are presenting or are not presenting. In your explanation, you should include a detailed discussion on why each company uses certain inventory accounts in comparison to the other companies. If a company does not have inventory, explain in detail the reason why there is no inventory accounts. What do these accounts represent and give dollar amounts of the inventory amounts? Make sure you are giving a detailed explanation of the similarities and differences you found in the balance sheet and notes to the financial statements in reference to how the companies are handling the inventory. Give the page number(s) of the balance sheets and notes you used for your comparison of each of these companies. Additional guidance: The balance sheet and the statement of financial position are the same thing.  5. Provide an in-depth summary of what you have learned about the companies you picked for your analysis in reference to the selling of inventory or services and how this impacts the financial statements.   Additional resources you might want to look at if you are having trouble using EDGAR or understanding the 10-K. 1. I would suggest everyone read this link from the SEC website-How to read a 10-K http://www.sec.gov/answers/reada10k.htm 2. Another resource for 10-K shows what the report means. http://beginnersinvest.about.com/od/annualreports/a/10k.htm 3. What is a publicly traded company? http://financial-dictionary.thefreedictionary.com/Publicly-Traded+Company 4. List of publicly traded companies: http://www.investorguide.com/stock-list.php  

Part 2 Response

Please copy and paste what you have written for your response to Project 3-Part 2 below: You will be graded based on meeting the requirements of the rubric. You will earn zero credit for Part 2, if you did not use the most current 10-K from the SEC EDGAR system.