In March, 

Oriole Company completes Jobs 10 and 11. Job 10 cost $22,800 and Job 11 cost $32,200. On March 31, Job 10 is sol
the customer for $43,500 in cash.
Journalize the entries for the completion of the two jobs and the sale of Job 10. 

Job 10 Job 11
DM 12,000
DL 7,800 I made these
MOH 3,000 number up
Total Cost 22,800 32200
Sales Price 43,500

Dr. Inventory - Finished Goods 55,000

Cr, Inventory - Work In Process 55,000

Dr. Cash or Accounts Receivable 43,500

Cr. Sales Revenue 43,500
to recognize the sale

Dr. Cost of Goods Sold 22,800

Cr. Inventory - Finished Goods 22,800
to recognize the cost of the product

Raw Material WIP FG COGS MOH

1-Jan 50,000
3-Jan -12,000 12,000
38,000
30-Jan 7,800
1-Feb -1,800 1,800
36,200
28-Feb 30,000
31,800
3000 -3000
22,800
5-Mar -22,800 22,800
0
8-Mar -22,800 22,800

Dr. Inventory - Raw Material 50,000

Cr. Cash 50,000

Dr. Inventory - Work in Process 12,000

Dr. MOH 1,800
Cr. Inventory - Raw Material 13,800
DR. Inventory - Work In Process 7,800
Cr. Salary Payable/Cash 7,800

Dr. MOH 30,000

Cr. Cash 30,000

DR. Inventory - Work In Process 3000

Cr. MOH 3000

Dr. Inventory - Finished Goods 22,800

Cr. Inventory - Work In Process 22,800

Dr Cash 35,000
Cr, Sales Revenue 35,000

Dr. Cost of Goods Sold 22,800

Cr. Inventory - Finished Goods 22,800
2,200. On March 31, Job 10 is sold to
Curly Girl Manufacturing manufactures salon-quality hair dryers. Curly Girl applies overhead based on direct labor
hours. The company's predetermined overhead rate was based on an estimated 480,000 direct labor hours and
$1,728,000 estimated total overhead. During November, the company manufactured 22,400 hair dryers in Job
CG12 and incurred the following costs: Direct Materials: $103,040 Direct Labor (39,200 hours at $18): $705,600
and Actual overhead incurred during the month: $148,960. What is the unit cost of the hair dryers produced in Job
CG12?

POHR = estimated MOH 1,728,000 3.60 dollars per DLH

estimated DLH 480,000

Job CG12 Actual MOH

units 22,400 Per unit everything in November
DM 103,040 4.60
DL 705,600 31.50
MOH 141,120 6.30
Total 949,760 42.40

42.40
 ased on direct labor
ct labor hours and
hair dryers in Job
at $18): $705,600
ryers produced in Job

148960
verything in November
In January, Pharoah Tool & Die requisitions raw materials for production as follows:
Job 1 $910, Job 2 $1,400, Job 3 $740, and general factory use $660.
Prepare a summary journal entry to record raw materials used.

Dr. Raw Materials

Cr. Cash

Dr. Inventory - Work in Process 3050 Direct materials used in Jobs 1, 2 and 3
Dr. MOH Control 660 Indirect material used in all job
Cr. Raw material 3710
During the first quarter, Pharoah Company incurs the following direct labour costs:
January $55,800, February $46,300, and March $67,000.

For each month, prepare the entry to assign overhead to production using a
predetermined rate of 90% of direct labour costs (date journal entries as at the end
of the month).

Q1
Jan Feb March
DL Cost 55,800 46300 67000
Overhead 50220 41670 60300

Dr. Inventory - WIP 50220

Cr. MOH 50220

Dr. Inventory - WIP 41670

Cr. MOH 41670

Dr. Inventory - WIP 60300

Cr. MOH 60300
The Heidelberg Company began the period with a balance of $13,000 in its Work in Process (WIP)
account. During the period the company incurred $16,000 in direct labour costs, requisitioned
$10,000 in direct materials, and applied $17,000 in manufacturing overhead. Actual overhead
costs for the period were $18,500. If the balance in the WIP account at the end of the period was
$22,000 then Cost of Goods Manufactured for the period was

Opening WIP 13,000

DM 10,000
DL 16,000
MOH - Applied 17,000
Total Production Costs 43,000

Ending WIP 22,000

COG Manufactured 34,000 = opening WIP + manufacturing production cost - ending WIP

Actual MOH 18,500

Applied MOH 17,000
1,500 underapplied

Option 1: Dr. COGS 1500

Cr. MOH Control 1500

Option 2: Dr. Inventory - WIP 300

Dr. Inventory - Finished Goods 450 Total
Dr. COGS 750 WIP 20,000
Cr. MOH Control 1500 FG 30,000
COGS 50,000
100,000
Option 3 - keep it in MOH Control and deal with it next year
"do nothing"
20% 300
30% 450
50% 750
At the beginning of the year, managers at King Industries estimated $400,000 in manufacturing
overhead, 20,000 direct labor hours and 50,000 machine hours. Actual manufacturing costs at
the end of the year were $425,000 in manufacturing overhead. During the year 22,000 direct
labor hours and 47,000 machine hours were incurred. If overhead is applied based on direct
labor hours, how much overhead was applied during the year?

POHR 400,000 20 dollars per hour

20,000

Applied MOH 440000

Actual MOH 425000
15000 overapplied

Option 1: Dr. MOH 15000

Cr. COGS 15000

Option 2: Dr MOH Control 15000

Cr. Inventory - WIP 3000 Total
Cr. Inventory - Finished Goods 4500 WIP 20,000
Cr. COGS 7500 FG 30,000
COGS 50,000
100,000
Option 3 - keep it in MOH Control and deal with it next year
"do nothing"
20% 3000
30% 4500
50% 7500
Contribution Margin Income Statement
Per Unit Percentage Total
Revenue 80 100%
Variable Cost 32 40%
Contribution Margin 48 60%
Fixed Cost
Net Income

Per Unit Percentage Total

Revenue 500 100%
Variable Cost 350 70%
Contribution Margin 150 30%
Fixed Cost
Net Income

Breakeven Formula = Total FC

Contribution Margin Per Unit

Breakeven Formula = Total FC

Revenue per unit - Variable Cost per unit

PercentageTotal
Revenue 100% 2,000,000 2,000,000
Variable Cost 40% 800000 800000
Contribution Margin 60% 1,200,000 1,200,000
Fixed Cost 1,200,000 1,200,000
Net Income 0 0
Week 7

1. Determine if the following statements are true or false:

a) A true variable cost is when the amount incurred DOES NOT vary in direct pr
b) a cost driver is what causes the incurrence of a variable cost
c) for step variable cost the amount incurred/used varies in direct proportion t
d) a fixed cost changes based on the number of units produced
e) the break even point is when the gross profit margin equals the fixed costs
f) Mixed costs have two elements: fixed and variable costs
g) in a contribution income statement the line items are organized by function
h) the break even point is when the contribution margin equals the fixed & var

2. Determine if the following are discretionary or committed fixed costs

a) an annual marketing contract for the next 10 years that can be cancelled at t
b) a 5 year power contract with fixed rates and no cancellation clauses other th
c) the depreciation expense for the head office building
d) the CEO compensation package
e) a 1 year contract for the use of a research lab
f) a 2 year contract for a sales office in a new market, the contract can be cance

3. Using the facts below for ABC corp who produces golf carts determine the break even units for
margin of safety for 2022 ($ and % amount):
Facts:
In 2021 the following occurred:
Sales revenue was $800,000 and 80 golf carts were sold
the material/labour for each cart is $2,500
the rent for the golf cart factory is $50,000 per year
the sales team is outsourced and charges $100,000 per year and takes a
commission of 20% of the sale price per cart
2021
CVP Analysis Per unit Total Breakeven
Units 1 80 28
Revenue 10000 800,000 280000
Variable Cost
Material and Labour 2,500 200,000 70000
Commission Fee 2,000 160,000 56000
Total Variable Costs 4,500 360,000 126000

Contribution Margin 5,500 440,000 154000

Fixed Cost
Total Factory Rent 50,000 50,000
Selling costs 100,000 100,000
Total Fixed Cost 150,000 150,000

Net Income 290,000 4,000

Breakeven point = Total Fixed Cost 150,000

unit contribution Margin 5,500

Breakeven units 27.2727272727273

round UP
28 units
Breakeven revenue 280000

MOS ($) budgeted or actual Sales– Breakeven Revenue

800,000 -280000 520,000

MOS (%) Margin of Safety ($)/budgeted or actual sales

520,000 65%
800,000
DOES NOT vary in direct proportion to the level of production activity
riable cost
aries in direct proportion to the level of production activity
s produced
gin equals the fixed costs

are organized by function

rgin equals the fixed & variable costs

s that can be cancelled at the start of each year

ancellation clauses other than bankruptcy

, the contract can be cancelled with 4 months notice

ne the break even units for 2021 and 2022 using all three methods we learned in class and the

Budget for 2022 has the following in it

30% increase in price and 100 golf carts to be sold
the material/labour for each cart is expected to increase by 10%
no change to the rent
per year and takes a the sales team will increase there salary to $110,000 per year but

2022
CVP Analysis Per unit Total Breakeven
Units 1 100 21
Revenue 13000 1,300,000 273000
Variable Cost
Material and Labour 2,750 275,000 57750
Commission Fee 2,600 260,000 54600
Total Variable Costs 5,350 535,000 112350

Contribution Margin 7,650 765,000 160650

Fixed Cost
Total Factory Rent 50,000 50,000
Selling costs 110,000 110,000
Total Fixed Cost 160,000 160,000

Net Income 605,000 650

Breakeven point = Total Fixed Cost 160,000

unit contribution Margin 7,650

Breakeven units 20.9150326797386

round UP
21 units
Breakeven revenue 273000

MOS ($) budgeted or actual Sales– Breakeven Revenue

1,300,000 -273000 1,027,000

MOS (%) Margin of Safety ($)/budgeted or actual sales

1,027,000 79%
1,300,000
 Answer

Answer

o increase by 10%

10,000 per year but will continue to charge a commission of 20% of the 2022 sale price per cart