Marigold Wings, Inc. manufactures airplanes for use in stunt shows. Marigold\'s

Question

Marigold Wings, Inc. manufactures airplanes for use in stunt shows. Marigold's factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each plane has different features (such as its shape, weight, and color), Marigold uses a job order costing system to accumulate product costs. At the end of 2016, Marigold's accountants developed the following expectations for 2017 based on the marketing department's sales forecast Budgeted overhead cost Estimated machine hours Estimated direct labor hours Estimated direct materials cost $1,079,000 47,000 12,000 $1,520,000 Marigold's inventory count, completed on December 31, 2016, revealed the following ending inventory balances Raw Materials Inventory Work in Process Inventory$626,000 Finished Goods Invento $249,000 $1,810,000 The company's 2017 payroll data revealed the following actual payroll costs for the year: Annual Salary per per Hour EmployeeEmployee Total Hours Worked Number Employe Wage Rate Job Title President and CEO Vice president and CFO Factory manager Assistant factory manager Machine operator Security guard, facto Forklift operator Corporate secreta Janitor, facto $224,000 $178,000 40,700 $30,300 $20,700 $36,700 $14.5 2,250 2,000 2,150 $7.5 The following information was taken from Marigold's Schedule of Plant Assets. All assets are depreciated using the straight-line method Salvage Value Usefu Life Price $4,000,000 Plant Asset Factory building Administrative office $150,000 20 Years $125,000 30 Years $20,000 12 Year $650,000 Factory equipment $2,000,000

Explanation / Answer

Marigold Wings Inc. Transactions for 2017 ($) T-Accounts Raw Materials Inventory Debit Credit Balance Bal 249000 249000 Purchases 1949000 2198000 Direct 2198000 Material 1581000 617000 Indirect 617000 Material 279000 338000 Bal 338000 Work in process Inventory Payroll Debit Credit Balance Number Rate/hour Annual salary Hours worked Debit Credit Balance Bal 626000 626000 President & CEO 24000 24000 Overhead 626000 Vice President & CFO 178000 202000 based on 626000 Factory Manager 40700 242700 Direct Material 1581000 2207000 Asst Factory Manager 30300 273000 Finished goods 3450000 -1243000 Machine Operator 5 145 2250 1631250 1904250 Under-applied -1243000 Security Guard (Factory) 2 20700 41400 1945650 Overhead 1243000 0 Forklift Operator 2 7.5 2000 30000 1975650 Corporate Secretary 1 36700 36700 2012350 Finished Goods Inventory Janitor (Factory) 2 6 2150 25800 2038150 Debit Credit Balance 2038150 Bal 1810000 1810000 Purchase price Salvage value Useful Life (Yrs) Depreciation Work in process 3450000 5260000 Schedule of Plant Assets Cost of goods sold 3650000 1610000 Factory Building 4000000 150000 20 192500 Under-applied overhead Administrative Office 650000 125000 30 17500 31-Dec-17 Work in process 1243000 1243000 Factory Equipment 2000000 20000 12 165000 Cost of goods sold (Markup 80%) Other Miscellanous Costs Factory Office Sales X 100/180 3650000 Factory Insurance 12000 12000 Administrative Office Utilities 5900 5900 Factory Utilities 31000 31000 Office Supplies 5600 5600 54500 43000 11500 Sales 31-Dec-17 Accounts Payable 6570000 6570000

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