Farm Equipment, Inc., produces tractors and other farm machinery. Each piece of equipment is built to customer specifications. During May, its first month of operations, Farm Equipment, Inc., began working on three customer orders: jobs 1, 2, and 3. The following transactions occurred during May: Purchased production materials on account totaling $450,000
Processed material requisitions for the following items:
Job 1 direct materials $77,600
Job 2 direct materials $38,600
Job 3 direct materials $45,000
Indirect materials $87,000
Processed timesheets showing the following:
Job 1 direct labor hours (700 hours) $14,800
Job 2 direct labor hours (550 hours) $11,800
Job 3 direct labor hours (300 hours) $ 6,500
Indirect labor $ 9,700
Applied overhead using a predetermined rate of 160 percent of direct labor cost
Completed job 1 and transferred it to finished goods
Delivered job 1 to the customer and billed her $140,000. (Hint: Two entries are required—one for the cost of the goods and another for the revenue.)
Required: Calculate the production costs incurred in May for each of the three jobs. (Answers must be entered as numbers only. No spaces, dollar signs, commas, decimals, etc. Example: 50000)

Job 1

Job 2

Job 3

Total

Direct Materials

A. $

D. $

G. $

$161,200

Direct Labor

B. $

E. $

H. $

$33,100

Manufacturing Overhead

C. $

F. $

I. $

$52,960

Total Cost Per Job:

$116,080

$69,280

$61,900

$247,260

Using the previous information, make the appropriate journal entry for each item described above. Assume all payments will be made next month. You will use the following accounts at least once: Raw Materials Inventory, Accounts payable, WIP Inventory, Manufacturing Overhead, Raw Materials Inventory, Wages Payable. (Answers must be entered as numbers only. No spaces, dollar signs, commas, decimals, etc. Example: 50000)

05/01/20XX

J.

$450,000

K.

$450,000

Purchased Production Materials on Account

05/XX/20XX

WIP Inventory

L. $

Manufacturing O/head

M. $

Raw materials Inventory

$248,200

Transfer Raw Materials into WIP

05/XX/20XX

WIP Inventory

N. $

Manufacturing Overhead

$9,700

Wages Payable

$42,800

Apply labor costs to Inventory

05/01/20XX

WIP Inventory

$52,960

Manufacturing Overhead

$52,960

Apply Man. Overhead to Inventory costs

“wonderful! not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well,” said kim clark, president of martell company. “our $11,150 overall manufacturing cost variance is only 3% of the $1,536,000 standard cost of products made during the year. that’s well within the 3% parameter set by management for acceptable variances. it looks like everyone will be in line for a bonus this year.” the company produces and sells a single product. the standard cost card for the product follows: standard cost card—per unit direct materials, 4.00 feet at $4.00 per foot $ 16.00 direct labor, 1.1 direct labor-hours at $13 per direct labor-hour 14.30 variable overhead, 1.1 direct labor-hours at $2.40 per direct labor-hour 2.64 fixed overhead, 1.1 direct labor-hours at $6.50 per direct labor-hour 7.15 standard cost per unit $ 40.09the following additional information is available for the year just completed: a. the company manufactured 20,000 units of product during the year.b. a total of 77,000 feet of material was purchased during the year at a cost of $4.25 per foot. all of this material was used to manufacture the 20,000 units. there were no beginning or ending inventories for the year.c. the company worked 24,000 direct labor-hours during the year at a direct labor cost of $12.50 per hour.d. overhead is applied to products on the basis of standard direct labor-hours. data relating to manufacturing overhead costs follow: denominator activity level (direct labor-hours) 19,000 budgeted fixed overhead costs $ 123,500 actual variable overhead costs incurred $ 64,800 actual fixed overhead costs incurred $ 120,900required: 1. compute the materials price and quantity variances for the year. (round standard price and actual price to 2 decimal places. indicate the effect of each variance by selecting "f" for favorable, "u" for unfavorable, and "none" for no effect (i.e., zero 2. compute the labor rate and efficiency variances for the year. (round standard rate and actual rate to 2 decimal places. indicate the effect of each variance by selecting "f" for favorable, "u" for unfavorable, and "none" for no effect (i.e., zero 3. for manufacturing overhead compute: a. the variable overhead rate and efficiency variances for the year. (round standard rate and actual rate to 2 decimal places. indicate the effect of each variance by selecting "f" for favorable, "u" for unfavorable, and "none" for no effect (i.e., zero b. the fixed overhead budget and volume variances for the year. (indicate the effect of each variance by selecting "f" for favorable, "u" for unfavorable, and "none" for no effect (i.e., zero

Which term refers to the cost that motivates an economic decision

The strength of the economy depends on the balance pf production and consumption of goods and consumption of goods and services