ACC104 CHAPT. 17 SOLUTIONS

Solutions to Exercises
Ex. 17–1
a.
Process costing or activity-based costing

b.
Cost of finished goods manufactured

c.
Equivalent units

d.
None (this statement describes underapplied overhead)

e.
Job order costing or activity-based costing

f.
Activity-based costing

Ex. 17–2
a.
(1)
Materials Inventory
XXX

Accounts Payable

XXX

To record the purchase of direct materials.

(2)
Work in Process Inventory
XXX

Materials Inventory

XXX

To record cost of direct materials used.

b.
(1)
Direct Labor
XXX

Cash

XXX

To record factory payroll paid to direct workers.

(2)
Work in Process Inventory
XXX

Direct Labor

XXX

To record cost of direct labor applied to production of the period.

c.
(1)
Manufacturing Overhead
XXX

Cash (or Accounts Payable)

XXX

To record factory overhead cost (such as payroll for indirect labor) incurred.

(2)
Work in Process Inventory
XXX

Manufacturing Overhead

XXX

To record factory overhead costs applied to production of the period.

d.
(1)
Finished Goods Inventory
XXX

Work in Process Inventory

XXX

To record transfer of cost of completed goods to the Finished Goods Inventory account.

(2)
Cost of Goods Sold
XXX

Finished Goods Inventory

XXX

To record cost of goods sold.

Ex. 17–3
a.
$3,150 ($900 + $2,250 = jobs no. 103 and 104)

b.
$7,440 ($4,200 + $3,240 = jobs no. 101 and 102)

c.
$13,690 ($4,200 + $3,240 + $6,250 = jobs no. 101, 102, and 104)

d.
$9,700 ($6,000 + $3,700 = jobs no. 105 and 106)

e.
$2,900 (job no. 103)

Ex. 17–4
a.
Work in Process Inventory
12,200

Materials Inventory

7,720

Direct Labor

1,400

Manufacturing Overhead

3,080

Manufacturing costs incurred on job no. 321.

b.
Finished Goods Inventory