B-17.06 Ashley Corporation provided the following list of cost data related to its manufacturing operations for the month of September 2014. – SeeTutorials.com

DOWNLOAD: B-17.06 Ashley Corporation provided the following list of cost data related to its manufacturing operations for the month of September 2014. – SeeTutorials.com

Ashley Corporation provided the following list of cost data related to its manufacturing operations for the month of September 20X4.
	Beginning raw materials inventory	966 400,00 ₽
	Raw materials purchased (net)	2 345 500
	Ending raw materials inventory	818 200
	Direct labor costs	322 300
	Indirect materials	125 500
	Indirect labor	88 900
	Factory utilities and maintenance	456 000
	Factory depreciation	56 600
	Other factory related overhead	24 400
	Beginning work in process	777 000
	Ending work in process	717 000
(a)	Arrange the cost data into a statement of cost of goods manufactured.
(b)	If Ashley’s cost of goods sold for the month was $4,000,000, how much was the increase or decrease in finished goods inventory for the month of September?

Zeus Corporation produces cultured diamonds via a secretive process that grows the diamonds in a vacuum chamber filled with a carbon gas cloud.  The diamonds are produced in a single continuous process, and Zeus uses the weighted-average process costing method of accounting for production.   The production process requires constant utilization of facilities and equipment, as well as direct labor by skilled technicians.  As a result, direct labor and factory overhead are both deemed to be introduced uniformly throughout production.
Zeus Corporation prepared the following “unit reconciliation” for the month of July:
	Unit Reconciliation:
				Quantity Schedule
	Beginning Work in Process			5 000
	Started into Production			6 000
	Total Units into Production			11 000		Equivalent Units Calculations:
							Conversion
						Direct  Materials	Direct Labor	Factory Overhead
	To Finished Goods			8 000		8 000	8 000	8 000
	Ending Work in Process			3 000		1 800	1 500	1 500
	Total Units Reconciled			11 000		9 800	9 500	9 500
						Ending WIP Completion Status: Materials = 60% and Conversion = 50%
The above beginning work in process inventory had an assigned cost of $3,000,000, divided between direct materials (30%), direct labor (20%), and factory overhead (50%).
Additional costs incurred during July were $9,500,000, divided between direct materials (15%), direct labor (25%), and factory overhead (60%).
Prepare a schedule showing the calculation of cost per equivalent unit.

Zeus Corporation produces cultured diamonds via a secretive process that grows the diamonds in a vacuum chamber filled with a carbon gas cloud.  The diamonds are produced in a single continuous process, and Zeus uses the weighted-average process costing method of accounting for production.   Below is the company’s calculation of cost per equivalent unit for October.  During October, the company completed and transferred 8,000 diamonds to finished goods.  An additional 4,000 units were still in process at the end of the month.  The ending work in process was 60% complete with respect to direct materials and 40% complete with respect to both elements of conversion cost.

Prepare a schedule showing the allocation of total cost between finished goods and ending work in process.

Cost Per Equivalent Unit:

Conversion

Total  Cost

Direct  Materials

Direct  Labor

Factory  Overhead

Beginning Work in Process

3 900 000,00 ₽

1 170 000,00 ₽

780 000,00 ₽

1 950 000,00 ₽

Cost incurred during period

9 300 000

1 860 000

2 325 000

5 115 000

Total cost

13 200 000,00 ₽

3 030 000,00 ₽

3 105 000,00 ₽

7 065 000,00 ₽

Equivalent units

÷        10,400

÷        9,600

÷        9,600

Costs per equivalent unit

291,35 ₽

323,44 ₽

735,94 ₽

$1,059.38

$1 350,72

Hawthorn Corporation manufactures custom all-terrain vehicles (ATVs) and uses a job costing system to assign and track costs.  March’s beginning inventory consisted of the following components:
	Raw materials	65 000,00 ₽
	Work in process	27 000
	Finished goods	80 000
The above beginning work in process consisted only of Job #02.778.  The finished goods inventory consisted of Job #01.987 ($42,500) and Job #02.665 ($37,500).
The following descriptions summarize the various transactions that occurred during March:
Purchased $112,000 of raw materials.
Used $117,000 of raw materials in the production process. Of this amount, $95,000 consisted of parts and other materials “directly” incorporated into ATVs.  The remainder was “indirect” material for shop supplies and small dollar items that are not otherwise traceable to specific ATVs.
Total wages and salaries were $225,000.  This total was 60% attributable to direct labor, 10% to indirect labor, 5% to sales commissions, and 25% to general and administrative activities.
Depreciation for the period totaled $28,000.  Of this amount, 75% related to factory and factory related equipment, and is contemplated in the factory overhead rates.  The other 25% is related to general and administrative activities.
Other general and administrative costs, excluding wages and depreciation, totaled $15,000.
Other factory overhead costs, excluding indirect materials, wages, and depreciation, totaled $35,500.
Hawthorn applies factory overhead at 75% of direct labor costs.
The ending work in process consisted of two jobs:  Job #03.004 ($25,500) and Job #03.772 ($21,500).  All completed units had been delivered to customers, and there was no ending finished goods inventory.  Sales for the month amounted to $625,000.  All sales are for cash at time of shipment.
(a)	Prepare T-accounts showing how the above costs flow through the accounting system.  For simplicity, you may assume that all expenditures and receipts settle in cash, and you will only need the following T-accounts:
	Raw Materials	Selling Expenses
	Work in Process	General & Administrative Expenses
	Finished Goods	Sales
	Cost of Goods Sold	Cash
	Factory Overhead	Accumulated Depreciation

(b)	Was overhead underapplied or overapplied?  What is the disposition of the difference between actual and applied factory overhead?
(c)	Prepare an income statement for March.   Income taxes of $50,000 were incurred during March.
(d)	Prepare summary journal entries to record March’s transactions.