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Mastery Problem: Job Order Costing Purl of Great Price Company Maria Young is the sole stockholder of Purt of Great Price Company (POGP Company, which produces tgh-end knitted sweaters and water 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 managetting supervisor (this employee work 20 hours per week as office manager and 20 hours per week as knitting supervisor). Al 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 enter's time being involved in handling and precing together the garments. The company also has a packaging machine wed to wrap the garments in plastic for shipping, which is operated by the office manager/itting supervisor approximately 5 hours per we The knitting machines were purchased on January 1 of the current year and cost $2.400 each, with an anticipated ne e of 10 years and no savage value. The packaging macha was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value Nov. 30 Trial Balance POGP Company Trial Balance November 30, 2018 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 I Predetermined Factory Overhead Rate Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DUO) 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 $4,000 Estimated factory utilities $4.000 Estimated factory rent $12,000 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of Me for the year 3,500 Compute the predetermined factory overhead rate for the current year Date: Dec, 10 Materials Requisition Reg. No. 12255 Job No. 83 Description Qty. Issued telt Price Yarn type D 700 skins $5 Amount $3,500 Dates Time Ticket No. 1255 Name: Susan Blake Work Description: Knitting/piecing Job No. Hours Worked Unit Price Amount 12/01-12/15 62 65 $15 $975 12/16-12/31 83 15 1,545 Total Cost $2,520 103 Name: Josh Porter Time Ticket No. 2274 Work Description: Knitting/piecing Dates Job No. 12/01-12/15 62 12/16-12/31 83 Hours Worked Unit Price Amount 75 $15 $1,125 15 1,320 Total Cost $2,445 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 60 $15 $900 12/16-12/31 83 109 15 1,635 Total Cost $2,535 700 Cosmeets 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 Cos 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 "o". If required, round your answers to the nearest cent. Job 62 100 units: Sweaters Direct Materials Direct Labor Factory Overhead Total Balance Dec. 1 $5,000 $300 $104 $5,404 Dec. 15 Total Cost Unit Cost Job 83 200 units Sweater vests Direct Materials Total Job Cost Balance Dec. 1 Direct Labor Factory Overhead $0 $0 $0 $0 Dec. 10 Dec. 31 Journal 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 journalize the entry to record the addition of the materials to Work in Process. If an amount box does not require an entry, leave it blank. Dec. 10 On December 15, review the Time Ticket tables to journalize the entry to record the addition of direct labor to Work in Process for the period December 1 through December 15. If an amount box does not require an entry, leave it blank. Dec. 15 On December 15, review the Time Ticket tables to journalize the entry to record the addition of factory overhead to Work in Process for the period December 1 through December 15. If an amount box does not require an entry, leave it blank. Dec. 15 88 On December 21, Job 62 is completed. Review the Job Cost Sheets and your journal entries. Journalize the entry to move the associated costs to the finished goods account. If an amount box does not require an entry, leave it blank. Dec. 21 On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each. Journalize the following transactions: a. The entry to record the sale. b. The entry to record the transfer of costs from Finished Goods to Cost of Goods Sold. If an amount box does not require an entry, leave it blank. Dec. 22 Dec, 22 I On December 31, the last work day of the year for the knitters, review the Time Ticket tables to journalize the entry to record the addition of direct labor to Work in Process for the period December 16 through December 31. If an amount box does not require an entry leave it blank. Dec. 31 On December 31, the last work day of the year for the knitters, review the Time Ticket tables to journalize the entry to record the addition of factory overhead to Work in Process for the period December 16 through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Un December 31, journalize the following transactions. Note that expenses (b), (c), and (d) were paid in cash. a. One month's depreciation on equipment b. One month's payroll for all employees c. One month's rent of $1,000 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank. Dec. 31 On December 31, prepare the journal entry to dispose of the balance in the factory overhead account. If an amount box does not require an entry, leave it blank. I Dec. 31 :88 Final Question What are the balances in the following accounts as of December 31? If an amount is zero, enter *o". Materials Work in Process Finished Goods Factory Overhead Cost of Goods Sold 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 worke 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 wee 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 machir was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value

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