Discussion module 3 MC
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T-AccountTemplateforProblem3-59-4.xlsxTemplate
| BUS 605 - Managerial Accounting | ||||||||
| P 3-59 in Hilton text | ||||||||
| Conundrum Corporation Mfg. | ||||||||
| Ledger | ||||||||
| Raw-Materials Inventory (RM) | Accounts Payable | |||||||
| Beg. Bal. | $12,000 | Beg. Bal. | ||||||
| + Purchases | - Used as DM (to WIP) | - Payments to Vendors | + purchases of RM | |||||
| $40,000 | ||||||||
| End. Bal. | $45,000 | End. Bal. | ||||||
| Work-in-Process Inventory (WIP) | Finished-Goods Inventory (FG) | |||||||
| Beg. Bal. | $8,000 | Beg. Bal. | $35,000 | |||||
| + Direct Materials | + Cost of Goods Mfrgd | - Cost of Goods Sold | ||||||
| + Direct Labor | - Cost of Goods Mfrgd (to FG) | |||||||
| + Manufacturing Overhead | End. Bal. | |||||||
| End. Bal. | ||||||||
| Cost of Goods Sold | ||||||||
| Manufacturing Overhead | ||||||||
| + Indirect Materials | + Cost of Goods Sold | |||||||
| + Indirect Labor | - Applied MOH (to WIP) | |||||||
| + Other Costs | ||||||||
| $60,000 | Sales Revenue | |||||||
| + Credit Sales | ||||||||
| Wages Payable | ||||||||
| Beg. Bal. | ||||||||
| - Payments to employees | + Wages Expense (to WIP as DL) | Accounts Receivable | ||||||
| $1,500 | End. Bal. | Beg. Bal. | $8,000 | |||||
| + Credit Sales | - Collections from customers | |||||||
| End. Bal. | ||||||||
Solution
| BUS 605 - Managerial Accounting | ||||||||
| P 3-59 in Hilton text | ||||||||
| Conundrum Corporation Mfg. | ||||||||
| Ledger | ||||||||
| Raw-Materials Inventory (RM) | Accounts Payable | |||||||
| Beg. Bal. | $15,000 (math) | $12,000 | Beg. Bal. | |||||
| + $70,000 | - Used as DM (to WIP) | - $81,000 (f) | + $70,000 (math) | |||||
| $40,000 | ||||||||
| End. Bal. | $45,000 | $1,000 (f) | End. Bal. | |||||
| Work-in-Process Inventory (WIP) | Finished-Goods Inventory (FG) | |||||||
| Beg. Bal. | $8,000 | Beg. Bal. | $35,000 | |||||
| + $40,000 | + $150,000 (math) | - $180,000 (g) | ||||||
| + $80,000 | - $150,000 | |||||||
| $60,000 | End. Bal. | $5,000 (h) | ||||||
| End. Bal. | + $38,000 (k) & (math) | |||||||
| Cost of Goods Sold | ||||||||
| Manufacturing Overhead | ||||||||
| + Indirect Materials | + $180,000 (g) | |||||||
| + Indirect Labor | - $60,000 (see * below) | |||||||
| + Other Costs | ||||||||
| $60,000 | Sales Revenue | |||||||
| + $216,000 (math) & (b) | ||||||||
| Wages Payable | ||||||||
| $1,000 (i) | Beg. Bal. | |||||||
| - $79,500 (i) | + $80,000 (math) | Accounts Receivable | ||||||
| $1,500 | End. Bal. | Beg. Bal. | $8,000 | |||||
| +$216,000 | - $205,000 (a) | |||||||
| End. Bal. | $19,000 (math) | |||||||
| Budgeted DL Hours = $960,000 (e ) / $20 (e ) = 48,000 | ||||||||
| pre-determined OH rate = $720,000 (d) / 48,000 = $15 per DL Hour | ||||||||
| * 4,000 DL hours x $15 per DL hour = $60,000 | ||||||||
| $ 80,000 DL / $20 per hour = 4,000 DL hours |
Answers
| BUS 605 - Managerial Accounting | |
| P 3-59 in Hilton text | |
| 1 | $216,000 from Sales Revenue t-account |
| 2 | $19,000 from Accounts Receivable t-account |
| 3 | $70,000 from Accounts Payable t-account |
| 4 | $38,000 from WIP t-account |
| $20,500 (k) + 500*$20 (k and e) + 500*$15 (overhead) | |
| 5 | $80,000 from Wages Payable t-account |
| 6 | $60,000 from Manufacturing Overhead t-account |
| 7 | $150,000 from Finished Goods Inventory t-account |
| 8 | $40,000 from RM Inventory t-account |
| 9 | $15,000 from RM Inventory t-account |
| 10 | $0 from Manufacturing Overhead t-account (60,000-60,000) |
