Perez Mfg.’s August 31 inventory of raw materials is $150,000. Raw materials purchases in September are$400,000, and factory payroll cost in September is $232,000. Overhead costs incurred in September are: indirect materials,$30,000; indirect labor, $14,000; factory rent,$20,000; factory utilities, $12,000; and factory equipment depreciation,$30,000. The predetermined overhead rate is 50% of direct labor cost. Job 114 is sold for $380,000 cash in September. Costs for the three jobs worked on in September follow.

$$\begin{array}{lcc} &\textbf{Job 114}&\textbf{Job 115}&\textbf{Job 116}\\[5pt] \text{Balances on August 31}\\ \qquad\text{Direct materials}&\text{\$\hspace{5pt}14,000}&\text{\$\hspace{5pt}18,000}\\ \qquad\text{Direct labor}&\text{\hspace{10pt}18,000}&\text{\hspace{10pt}16,000}\\ \qquad\text{Applied overhead}&\text{\hspace{15pt}9,000}&\text{\hspace{15pt}8,000}\\ \text{Costs during September}\\ \qquad\text{Direct materials}&\text{\hspace{5pt}100,000}&\text{\hspace{5pt}170,000}&\text{\$\hspace{5pt}80,000}\\ \qquad\text{Direct labor}&\text{\hspace{10pt}30,000}&\text{\hspace{10pt}68,000}&\text{\hspace{5pt}120,000}\\ \qquad\text{Applied overhead}&\underline{\textbf{\hspace{15pt}?\hspace{15pt}}}&\underline{\textbf{\hspace{15pt}?\hspace{15pt}}}&\underline{\textbf{\hspace{15pt}?\hspace{15pt}}}\\ \text{Status on September 30}&\text{Finished (sold)}&\text{Finished (unsold)}&\text{In process}\\ \end{array}$$

Required

1. Determine the total of each production cost incurred for September (direct labor, direct materials, and applied overhead) and the total cost assigned to each job (including the balances from August 31).

2. Prepare journal entries for the month of September to record the following. a. Materials purchases (on credit). b. Direct materials used in production. c. Direct labor paid and assigned to Work in Process Inventory. d. Indirect labor paid and assigned to Factory Overhead. e. Overhead costs applied to Work in Process Inventory. f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.) g. Transfer of Jobs 114 and 115 to the Finished Goods Inventory. h. Cost of Job 114 in the Cost of Goods Sold account. i. Revenue from the sale of Job 114. j. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

3. Prepare a schedule of cost of goods manufactured.

4. Compute gross profit for September. Show how to present the inventories on the September 30 balance sheet.

Analysis Component

5. The over- or underapplied overhead adjustment is closed to Cost of Goods Sold. Discuss how this adjustment impacts business decision making regarding individual jobs or batches of jobs.

Marcelino Co.’s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are$500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are: indirect materials,$50,000; indirect labor, $23,000; factory rent,$32,000; factory utilities, $19,000; and factory equipment depreciation,$51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 cash in April. Costs of the three jobs worked on in April follow.

$$\begin{array}{lcc} &\textbf{Job 306}&\textbf{Job 307}&\textbf{Job 308}\\[5pt] \text{Balances on March 31}\\ \qquad\text{Direct materials}&\text{\$\hspace{5pt}29,000}&\text{\$\hspace{5pt}35,000}\\ \qquad\text{Direct labor}&\text{\hspace{10pt}20,000}&\text{\hspace{10pt}18,000}\\ \qquad\text{Applied overhead}&\text{\hspace{10pt}10,000}&\text{\hspace{15pt}9,000}\\ \text{Costs during April}\\ \qquad\text{Direct materials}&\text{\hspace{5pt}135,000}&\text{\hspace{5pt}220,000}&\text{\$\hspace{1pt}100,000}\\ \qquad\text{Direct labor}&\text{\hspace{10pt}85,000}&\text{\hspace{5pt}150,000}&\text{\hspace{5pt}105,000}\\ \qquad\text{Applied overhead}&\underline{\textbf{\hspace{15pt}?\hspace{15pt}}}&\underline{\textbf{\hspace{15pt}?\hspace{15pt}}}&\underline{\textbf{\hspace{15pt}?\hspace{15pt}}}\\ \text{Status on April 30}&\text{Finished (sold)}&\text{Finished (unsold)}&\text{In process}\\ \end{array}$$

Required

1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead) and the total cost assigned to each job (including the balances from March 31).

2. Prepare journal entries for the month of April to record the following. a. Materials purchases (on credit). b. Direct materials used in production. c. Direct labor paid and assigned to Work in Process Inventory. d. Indirect labor paid and assigned to Factory Overhead. e. Overhead costs applied to Work in Process Inventory. f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.) g. Transfer of Jobs 306 and 307 to Finished Goods Inventory. h. Cost of goods sold for Job 306. i. Revenue from the sale of Job 306. j. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

3. Prepare a schedule of cost of goods manufactured.

4. Compute gross profit for April. Show how to present the inventories on the April 30 balance sheet.

5. Over- or underapplied overhead is closed to Cost of Goods Sold. Is this adjustment also posted to individual job cost sheets?

Determine which of the following are most likely to be considered as a job and which as a job lot.

 _____ 1. Hats imprinted with company logo 
 _____ 2. Little League trophies 
 _____ 3. A handcrafted table 
 _____ 4. A 90-foot motor yacht
 _____ 5. Wedding dresses for a chain of stores
 _____ 6. A custom-designed home

Match each of the terms/phrases numbered 1 through 5 with the best definition a through e.

 ____ 1. Cost accounting system      a. Production activities for a custom product.
 ____ 2. Target cost                 b. Production activities for a special order.
 ____ 3. Job                         c. A system that records manufacturing costs.
 ____ 4. Process operation           d. The expected selling price of a job minus its desired profit.
 ____ 5. Job order production        e. Mass production in a continuous flow of steps.

Manufacturers and merchandisers can apply just-in-time (JIT) to their inventory management. Apple wants to know the impact of a JIT inventory system on operating cash flows. Review Apple’s statement of cash flows in Appendix A to answer the following.

Required

1. Identify the impact on operating cash flows (increase or decrease) for changes in inventory levels (increase or decrease) for each of the fiscal years ended September 30, 2017, and September 24, 2016.

2. What impact (increase or decrease) would a JIT inventory system have on Apple’s (a) inventory and (b) operating cash flows?

The state of Tennessee passed the Butler Act. This bans public school teachers from teaching about evolution. A high school science teacher, Mr. Scopes, was arrested for teaching the theory of evolution in his class. Based on the Establishment Clause of the First Amendment, how would you rule?

Indentify the sampling method that was used.
In a medical research study, a researcher selects a hospital and interviews all the patients that day.

Which of the following is not an ethical principle regarding research on humans? a. Researchers must protect participants from needless harm and discomfort. b. Participants must take part in the study on a voluntary basis. c. Personal information about individual participants must be kept private. d. The research must be fully explained to participants when the study is completed. e. It is never acceptable for a researcher to deceive a participant during the research.

Marcus is doing a science experiment in which he measures the rate at which bacteria multiply. Every 15 seconds, the bacteria double in number. If there are 10 bacteria now, how many will there be in 2 minutes? A. 160 bacteria B. 256 bacteria C. 1,280 bacteria D. 2,560 bacteria

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows:

The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined overhead rate of $16.25 per direct labor-hour was based on a cost formula that estimated$650,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:

a. Raw materials were purchased on account, $510,000.

b. Raw materials used in production,$480,000. All of the raw materials were used as direct materials.

c. The following costs were accrued for employee services: direct labor, $600,000; indirect labor,$150,000; selling and administrative salaries, $240,000.

d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing),$367,000.

e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $500,000.

f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.

g. Jobs costing$\$1,680,000$ to manufacture according to their job cost sheets were completed during the year.

h. Jobs were sold on account to customers during the year for a total of $\$ 2,800,000$. The jobs cost $\$ 1,690,000$ to manufacture according to their job cost sheets. $\\[15pt]$

Required:

What is the ending balance in Raw Materials?

For the year ended December 31, 2017, the job cost sheets of Cinta Company contained the following data.

Other data:

1. Raw materials inventory totaled$15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.
2. Finished goods on January 1 consisted of Job No. 7638 for$87,000 and Job No. 7639 for $92,000.
3. Job No. 7640 and Job No. 7641 were completed during the year.
4. Job Nos. 7638, 7639, and 7641 were sold on account for$530,000.
5. Manufacturing overhead incurred on account totaled $120,000.
6. Other manufacturing overhead consisted of indirect materials$14,000, indirect labor $18,000, and depreciation on factory machinery$8,000.

Instructions (a) Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint: Use a single T-account for Work in Process Inventory.) Calculate each of the following, then post each to the T-account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs.

Research Project Research one of the technological advances made during the early $1800$s. Write a description of the technological advance you have researched and create a diagram showing how it works. Place the escription and the diagram in your portfolio.

As a part of their weather unit, Anoki's science class took a hot air balloon ride. As they passed over a fenced field, the angle of depression of the closer side of the fence was 32°, and the angle of depression of the farther side of the fence was 27°. If the height of the balloon was 800 feet, estimate the width of the field.

The following calendar year-end information is taken from the December 31, 2019, adjusted trial balance and other records of Leone Company.

Advertising expense . . . . . . . . . . . . . . . . $28,750
Depreciation expense—Office equipment . . . . . . . .  7,250
Depreciation expense—Selling equipment . . . . . . . . 8,600
Depreciation expense—Factory equipment . . . . . . .  33,550
Factory supervision . . . . . . . . . . . . . . . .  102,600
Factory supplies used (indirect materials) . . . . . . 7,350
Factory utilities . . . . . . . . . . . . . . . . . . 33,000
Direct labor . . . . . . . . . . . . . . . . . . . . 675,480
Indirect labor . . . . . . . . . . . . . . . . . . .  56,875
Miscellaneous production costs . . . . . . . . . . . . 8,425
Office salaries expense . . . . . . . . . . . . . . . 63,000
Raw materials purchases (direct materials) . . . . . 925,000
Rent expense—Office space . . . . . . . . . . . . . . 22,000
Rent expense—Selling space . . . . . . . . . . . . .  26,100
Rent expense—Factory building . . . . . . . . . . . . 76,800
Maintenance expense—Factory equipment . . . . . . . . 35,400
Sales . . . . . . . . . . . . . . . . . . . . . .  4,462,500
Sales salaries expense . . . . . . . . . . . . . . . 392,560

Using the following additional inventory information for Leone Company, complete the requirements below. Assume income tax expense is$233,725 for the year.

Inventories

Raw materials, December 31, 2018 . . . . . . . . $166,850 
Raw materials, December 31, 2019 . . . . . . . .  182,000 
Work in process, December 31, 2018 . . . . . . . . 15,700 
Work in process, December 31, 2019 . . . . . . . . 19,380
Finished goods, December 31, 2018 . . . . . . . . 167,350
Finished goods, December 31, 2019 . . . . . . . . 136,490

Required

1. Prepare the company’s 2019 schedule of cost of goods manufactured.
2. Prepare the company’s 2019 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.