The question just need to be answered and numbers put into the excel template
that is the link to the template all the information will go to
that’s the link the instructions for the project
Acct 102- Process Costing and ABC project
This project covers material covered in Ch. 16 and 17. The instructions and project information are listed in the Google Sheet link below. All answers should be submitted in the Excel template attached below.
These videos will help you complete the project (Links to an
1. Part 1 – Introduction to project
2. Part 2 – Project Walk-through (first half)
3. Part 3 – Project Walk-through (second half)
The project covers the steps taken to track the cost of manufacturing one or more products. Different types of raw materials will be purchased and applied to the project. Depending on the product, completion takes either two or three Work-In-Processes. Labor will be calculated and split between the processes. Accumulated factory overhead will be allocated to each project using the ABC method. Finally, a total cost for each product will be determined along with a suitable selling price.
1. Project Instructions – . Process Costing Project (Links to an external site.)
2. Excel template Download Excel template
Accounting 102 Process Costing & ABC Project
Jackson’s Vacuum Company
Jackson’s Vacuum company makes two types of vacuums: Basic and Advanced. The factory is set up into 3 working departments. Both vacuums utilize process #1 to assemble the basic components. Those units destined as basic will transition to department #2 to be finalized. The advanced vacuums will skip department #2 and go directly to the advanced processing department #3.
There are 4 types of raw material. #1-3 are all direct materials and #4 is an indirect material
#1 #2 #3 #4
Beg. Raw Material $13,000 $6,000 $45,000 $7,000
Purchased on account $180,000 $75,000 $380,000 $54,000
End. Raw materials $1,000 $10,500 $9,000 $3,000
Requested materials –
Dept. #1 $98,000 in raw material #1 was requested, $40,000 for #2, $195,000 for #3
Dept. #2 $20,000 in raw material #1 was requested, $17,500 for #2, $46,000 for #3
Dept. #3 $74,000 in raw material #1 was requested, $13,000 for #2, $175,000 for #3
Indirect materials (#4) used this year amounted to $58,000
There are 3 type of factory workers. Assembly line, area supervisor, and repairman/maintenance.
1. Assembly line workers:
a. 12 workers – each work 1,900 hours per year.
b. 6 workers work in process 1 and earn $12/hour.
c. The other 6 workers work equally in departments 2&3 and make $15/hour.
2. In total, there are 2 supervisors each paid $62,000 each and 2 repairman/maintenance each paid $40,000.
Other factory overhead consists of the following:
1. Property taxes paid for the year – $35,000
2. Utilities paid for the year – $145,000
3. Six large machines. Each with a value of $100,000 depreciated over 10 years. Two machines are used in each department.
Factory overhead is allocated using the ABC method and based on machine setups and machine hours
WIP #1 WIP #2 WIP #3
Total units transferred 56,000 37,000 19,000
Total machine hours 52,500 31,400 21,000
Total machine setups 4,200 4,600 8,450
Total Labor hours 11,400 4,560 6,840
Factory Overhead using machine hours = Fact. Dep. & Indirect materials total
Factory overhead using machine set ups = Property taxes, utilities and indirect labor total
Department #1 had 3,500 units in beginning WIP that were 50% complete as to conversion costs (totaling $12,000) and 100% complete for materials (totaling 42,000). 56,800 units were started into production. Transferred out 56,000 units which included 37,000 basic to WIP #2 and 19,000 advanced to WIP #3. The remaining ending inventory was 100% complete for materials and 40% for conversion costs.
Department #2 had 2,000 units in beginning WIP that were 50% complete as to conversion costs (totaling $3,000) and 100% complete for materials (totaling 10,000). 37,000 units were started into production. Transferred out 35,000 units. The remaining ending inventory was 100% complete for materials and 65%for conversion costs.
Department #3 had 1,000 units in beginning WIP that were 50% complete as to conversion costs (totaling $4,000) and 100% complete for materials (totaling 13,000). 19,000 units were started into production. Transferred out 19,200 units. The remaining ending inventory was 100% complete for materials and 70% for conversion costs.
Basic and advanced will split the WIP #1 based on the number of units of each type. Thus if there were $100 in WIP #1 and 20 total units (14 basic and 6 advanced), Each unit would absorb $5. Therefore the basic would account for $70 of WIP #1
Beginning finished goods for basic vacuums totaled 6,500 units at a total cost of $148,000
Beginning finished goods for advanced vacuums totaled 2,300 units at a total costs of $96,000
Total sales for the basic vacuum were 39,500 units @ $55 each
Total sales for the advanced vacuum were 19,800 units @ $86each
A. Prepare the following journal entries
1. Raw material purchases
2. Distribution of raw materials to each WIP or Factory Overhead
3. Accumulation of wages owed
4. Distribution of wages to each WIP or Factory Overhead
5. Accumulation of factory overhead
6. Allocation of Factory overhead using ABC per WIP
7. Transition of WIP 1 goods to either WIP 2 or 3
8. Transition of WIP 2 goods to Finished Goods
9. Transition of WIP 3 goods to Finished Goods
10. Sale of Basic vacuums
11. Sale of Advanced vacuums
B. What is the Gross Profit of each separately and combined?