ACC – Baucom Manufacturing Corporation & Zest Cola Corporation



2-13A Job-order costing system

Baucom Manufacturing Corporation was started with the issuance of common stock for $50,000. It purchased $7,000 of raw materials and worked on three job orders during 2012 for which data follow.(Assume that all transactions are for cash unless otherwise indicated.)

Factory overhead is applied using a predetermined overhead rate of $0.60 per direct labor dollar. Jobs 2 and 3 were completed during the period and Job 3 was sold for $10,000 cash. Baucom paid $400 for selling and administrative expenses. Actual factory overhead was $4,300.

a. Record the preceding events in a horizontal statements model. The first event for 2012 has been recorded as an example.
b. Reconcile all subsidiary accounts with their respective control accounts.
c. Record the closing entry for over – or underapplied manufacturing overhead in
d. Prepare a schedule of cost of goods manufactured and sold, income statement, and a balance sheet for 2012.

12-20A Process costing system

Zest Cola Corporation Produces anew soft drink brand, Sweet Spring, using two production departments, mixing and bottling. Zest’s beginning balances and data pertinent to the mixing department activities for 2011 follow.

1. Zest Cola issued additional common stock $54,000 cash.
2. The company purchased raw materials and productions supplies for $29,600 and $800, respectively , in cash.
3. The company issued $32,360 of raw materials to mixing department for the production of 800,000 units of Sweet Spring that were started in 2011. A unit of soft drink is the amount needed to fill a bottle.
4. The mixing department used 2,400 hours of labor during 2011, consisting of 2,200 hours for direct labor and 200 hours for indirect labor. The average wage was $9.60 per hour. All wages were paid in 2011 in cash.
5. The predetermined overhead rate was $1.60 per direct labor hour.
6. Actual overhead costs other than indirect materials and indirect labor for the year amounted to $1,260, which was paid in cash.
7. The mixing department completed 600,000 units of Sweet Spring. The remaining inventory was 25 percent complete.
8. The completed soft drink was transferred to the bottling department.
9. The ending balance in the Production Supplies account was $560.


a. Determine the number of equivalent units of Production.
b. Determine the product cost per equivalent unit.
c. Allocate the total cost between the ending work in process inventory and units transferred to the bottling department.


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