Cost Accounting Problem - Presentation with speaker notes

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Part I. – Introduction (2 slides)

1. Introduce your Team and overview of your presentation

2. Provide a detailed outline which identifies your agenda and learning outcomes.

Part II. – Subject Overview (4 slides)

Provide an overview of your cost accounting topic
What functions within an organization would your topic be relevant
Provide an example of an organization which implements your subject-matter as part of their operations.

Part III. – Conclusion (2 slides)

1. Provide a wrap up.

2. Any final analysis you want to leave your audience with (you can get creative here!)

3. Are there any addition readings, articles, literature you would recommend to the audience if they wanted to research your topic further?

Part IV. – Problem (2 slides)

1. Take the class through your problem and provide an eloquent solution and analysis.

Weinrich Manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor hours. On January 1, 2011, Job No. 25 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $10,000; direct labor $6,000; and manufacturing overhead $9,000. Job No. 23 had been completed at a cost of $42,000 and was part of finished goods inventory. There was a $5,000 balance in the Raw Materials Inventory account.

During the month of January, the company began production on Jobs 26 and 27, and completed Jobs 25 and 26. Jobs 23 and 25 were sold on account during the month for $63,000 and $74,000, respectively. The following additional events occurred during the month.

Purchased additional raw materials of $40,000 on account.

Incurred factory labor costs of $31,500. Of this amount $7,500 related to employer payroll taxes.

Incurred manufacturing overhead costs as follows: indirect materials $10,000; indirect labor $7,500; depreciation expense $12,000; and various other manufacturing overhead costs on account $11,000.

Assigned direct materials and direct labor to jobs as follows.

Job No.	Direct Materials	Direct Labor
25	$ 5,000	$ 3,000
26	17,000	12,000
27	13,000	9,000

The company uses direct labor hours as the activity base to assign overhead. Direct labor hours incurred on each job were as follows: Job No. 25, 200; Job No. 26, 800; and Job No. 27, 600.

Prepare entries in a job order cost system and job cost sheets.

(SO 2, 3, 4, 5, 6)

Instructions

(a)	Calculate the predetermined overhead rate for the year 2011, assuming Weinrich Manufacturing estimates total manufacturing overhead costs of $480,000, direct labor costs of $300,000, and direct labor hours of 20,000 for the year.

(b)	Open job cost sheets for Jobs 25, 26, and 27. Enter the January 1 balances on the job cost sheet for Job No. 25.

(c)	Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.

(d)	Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.

(e)	Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month. Job 25, $37,800 Job 26, $48,200

(f)	Prepare the journal entry (or entries) to record the sale of any job(s) during the month.

(g)	What is the balance in the Work in Process Inventory account at the end of the month? What does this balance consist of?

(h)	What is the amount of over- or underapplied overhead?