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Mastery Problem: Job Order Costing

Purl of Great Price Company

Maria Young is the sole stockholder of Purl of Great Price Company $($POGP Company$),$ which produces high$-$end knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters $($each of whom work $40$ hours per week$)$ and one office manager$/$knitting supervisor $($this employee works $20$ hours per week as office manager, and $20$ hours per week as knitting supervisor$).$ All wages are paid in cash at the end of each month.

Each knitter has a knitting machine that is used about $2/3$ of the knitter$$s time, the rest of the knitter$$s time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the office manager$/$knitting supervisor approximately $5$ hours per week.

The knitting machines were purchased on January $1$ of the current year, and cost $$2,400$ each, with an anticipated useful life of $10$ years and no salvage value. The packaging machine was purchased on the same date and cost $$4,800,$ with the same anticipated useful life and salvage value.

Question Content Area

Nov. $30$ Trial Balance

POGP Company

Trial Balance

November $30,20$Y$8$

Account Title Debit Credit

Cash $20,000$

Accounts Receivable $1,000$

Supplies $200$

Materials $5,000$

Work in Process $5,404$

Equipment $12,000$

Accumulated Depreciation$-$Equipment $825$

Accounts Payable $150$

Common Stock $10,000$

Retained Earnings $12,000$

Dividends $18,096$

Sales $307,500$

Cost of Goods Sold $255,040$

Factory Overhead $15$

Wages Expense $13,750$

$330,490330,490$

Predetermined Factory Overhead Rate

Since the company is more reliant on labor than machines, Maria decides to use direct labor hours $($DLH$)$ as the activity base for her predetermined factory overhead rate, rather than machine hours $($MH$).$

Estimated Selected Amounts for the Year

Estimated depreciation on equipment $$1,200$

Estimated total Office Manager$/$Knitting Supervisor wages $$30,000$

Estimated office utilities $$3,000$

Estimated factory utilities $$4,800$

Estimated factory rent $$24,000$

Activity Base Data

Estimated number of DLH for the year $6,250$

Estimated number of MH for the year $4,375$

Compute the predetermined factory overhead rate for the current year.

Question Content Area

Materials Requisition Date: Dec. $10$

Req. No$.12255$ Job No$.83$

Description Qty$.$ Issued Unit Price Amount

Yarn type B $600$ skeins $$5$ $$3,000$

Total issued $$3,000$

Time Ticket No$.1255$ Name: Susan Blake

Work Description: Knitting$/$piecing

Dates Job No$.$ Hours Worked Unit Price Amount

$12/01-12/156265$ $$20$ $$1,300$

$12/16-12/3183103202,060$

Total Cost $$3,360$

Time Ticket No$.2274$ Name: Josh Porter

Work Description: Knitting$/$piecing

Dates Job No$.$ Hours Worked Unit Price Amount

$12/01-12/156275$ $$20$ $$1,500$

$12/16-12/318388201,760$

Total Cost $$3,260$

Time Ticket No$.3923$ Name: Mary Jones

Work Description: Knitting$/$piecing

Dates Job No$.$ Hours Worked Unit Price Amount

$12/01-12/156260$ $$20$ $$1,200$

$12/16-12/3183109202,180$

Total Cost $$3,380$

Job Cost Sheets

On December $10,$ POGP Company receives an order for $200$ sweater vests and assigns Job $83$ to the order. Review the Materials Requisition table to add the materials to the Job Cost Sheet for Job $83.$

On December $15,$ review the Time Ticket tables to add the appropriate amount of direct labor and factory overhead costs to the Job Cost Sheet for Job $62$ for the period December $1$ through December $15.$

On December $31,$ the last work day of the year for the knitters, review Time Ticket tables to add the appropriate amount of direct labor and factory overhead costs to the Job Cost Sheet for Job $83$ for the period December $16$ through December $31.$

If there is no amount or an amount is zero, enter $"0".$ If required, round your answers to the nearest cent.

Job $62100$ units: Sweaters

Direct Materials Direct Labor Factory Overhead Total

Balance Dec. $1$ $$5,000$ $$300$ $$104$ $$5,404$

Dec. $15$ fill in the blank $98$c$8$f$1$fdffe$0010\_1$

fill in the blank $98$c$8$f$1$fdffe$0010\_2$

fill in the blank $98$c$8$f$1$fdffe$0010\_3$

fill in the blank $98$c$8$f$1$fdffe$0010\_4$

Total Cost $fill in the blank $98$c$8$f$1$fdffe$0010\_5$

$fill in the blank $98$c$8$f$1$fdffe$0010\_6$

$fill in the blank $98$c$8$f$1$fdffe$0010\_7$

$fill in the blank $98$c$8$f$1$fdffe$0010\_8$

Unit Cost $fill in the blank $98$c$8$f$1$fdffe$0010\_9$

Job $83200$ units: Sweater vests

Direct Materials Direct Labor Factory Overhead Total Job Cost

Balance Dec. $1$ $$0$ $$0$ $$0$ $$0$

Dec. $10$ fill in the blank $98$c$8$f$1$fdffe$0010\_10$

fill in the blank $98$c$8$f$1$fdffe$0010\_11$

fill in the blank $98$c$8$f$1$fdffe$0010\_12$

fill in the blank $98$c$8$f$1$fdffe$0010\_13$

Dec. $31$ fill in the blank $98$c$8$f$1$fdffe$0010\_14$

fill in the blank $98$c$8$f$1$fdffe$0010\_15$

fill in the blank $98$c$8$f$1$fdffe$0010\_16$

fill in the blank $98$c$8$f$1$fdffe$0010\_17$

Total Cost $fill in the blank $98$c$8$f$1$fdffe$0010\_18$

$fill in the blank $98$c$8$f$1$fdffe$0010\_19$

$fill in the blank $98$c$8$f$1$fdffe$0010\_20$

$fill

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