BA225 Managerial Accounting: Week 2 Assignment (BE2-1, BE2-2, BE2-3, E2-1, E2-2)

BA225 Managerial Accounting
Week 2 Application Problems

BE2-1 Knox Company begins operations on January 1. Because all work is done to customer specifications, the company decides to use a job order cost system. Prepare a flowchart of a typical job order system with arrows showing the flow of costs. Identify the eight transactions.

BE2-2 During January, its first month of operations, Knox company accumulated the following manufacturing costs: raw materials $4,000 on account, the factory labor $6000 of which $5,200 relates to factory wages payable and $800 relates to payroll taxes payable, and utilities payable $2,000. Prepare separate journal entries for each type of manufacturing coat.

BE2-3 In January, Knox Company requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,400, Job 3 $700, and general factory use $600. Prepare a summary journal entry to record raw material used.

E2-1 The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer’s payroll taxes for the factory payroll are $8,000. The fringe benefits to be paid by the employer on this payroll are $6,000. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor.

(a) Prepare the entry to record the factory labor costs for the month of January.
(b) Prepare the entry to assign factory labor to production.

E2-2 Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,500 and two jobs in process: Job No. 429 $2,000 and Job No. 430 $1,500. During May, a summary of source documents revels the following.
JOB NUMBER MATERIALS REQUISITION SLIPS LABOR TIME TICKETS 429 $2,500 $1,900 430 3,500 3,000 431 4,400 $10,400 7,600 $12,500 General Use 800 1,200 $11,200 $13,700