All homework problems to be turned in should be prepared on Spreadsheets, in a professional manner. Each student should prepare his or her own individual solution to the problems. Identical papers will be penalized. Late papers will not be accepted.
Jody Manufacturing Company, located at 15 Farm Street, Bridgewater, MA. manufactures puzzles that depict the work of famous artists. The company rents a small factory and uses local labor on a part-time basis. The company assigns overhead to products using a predetermined rate based on direct labor hours. Expected total overhead costs for the year are $19,200 and expected direct labor hours are 9,600.
The following events affected Jody during its first year of operation. (Assume that all transactions are cash transactions unless otherwise stated).
Transactions for the first month of operation, January, 2013:
1. Issued common stock for $25,000; used the cash to purchase office equipment for $2,500 and manufacturing equipment for $10,000.
2. Purchased $4,000 of direct raw materials and $400 of indirect raw materials. Indirect raw materials are recorded in a Production Supplies account.
3. Used $3,896 of direct raw materials.
4. Used 700 direct labor hours; production workers were paid $12 per hour.
5. Paid $800 for salaries to administrative and sales staff.
6. Paid $700 for factory supervision and maintenance.
7. Paid $600 for rent and utilities on the manufacturing facilities. The company allocates the rent based on square footage in the manufacturing facility. 90% of the utility bill is deemed to be related to manufacturing and 10% to the administrative offices. Total square footage in the facility is 2,000 square feet, of which 200 square feet represent administrative space.
8. Paid health insurance premiums of $2000. 60% of the bill was related to production workers, 10% to factory supervisors and maintenance and the remainder to the administrative and sales staff.
9. Started and completed 956 puzzles.
10. Sold 800 puzzles at a price of $25 each.
Transactions for the remainder of 2013:
11. Acquired an additional $200,000 by issuing common stock.
12. Purchased $46,000 of direct raw materials and $4,000 of indirect raw materials.
13. Used $41,050 of direct raw materials.
14. Paid production workers $12 per hour for 9,000 hours of work on puzzles; in addition, the workers were paid for 200 hours of time spent cleaning the factory.
15. Paid $8,800 for salaries of administrative and sales staff
16. Paid $7,700 for salary of the production supervisor.
17. Paid $3,600 rental costs and $3,000 for utility