Cost analysis and identification. Georgia Pacific, a manufacturer, incurs the following costs

Module 1 Review QuestionsI. Cost analysis and identification.Georgia Pacific, a manufacturer, incurs the following costs:a. Classify each cost as either a product or a period cost. If a product cost, identify it asa prime or a conversion cost.b. Classify each product cost as either a direct cost or an indirect cost using the productas the cost object.II. Manufacturing statement preparationGiven the following selected account balances of Randa Company, prepare its manufacturingstatement for the year ended on December 31, 2013. Include a listing of the individual overheadaccount balances in this statement.Sales………………………………………………………………………………………………………………………Raw Materials inventory, Dec. 31, 2012………………………………………………………………………Goods in process inventory, Dec. 31, 2012…………………………………………………………………Finished goods inventory, Dec. 31, 2012…………………………………………………………………….Raw materials purchases………………………………………………………………………………………….Direct labor……………………………………………………………………………………………………………..Factory computer supplies used………………………………………………………………………………..Indirect labor……………………………………………………………………………………………………………Repairs – factory equipment……………………………………………………………………………………..Rent cost of factory building………………………………………………………………………………………Advertising expense…………………………………………………………………………………………………General and administrative expense…………………………………………………………………………..Raw materials inventory, Dec. 31, 2013………………………………………………………………………Goods in process inventory, Dec. 31, 2013…………………………………………………………………Finished goods inventory, Dec. 31, 2013…………………………………………………………………….$1,252,00039,00055,90064,750177,600227,00019,84049,0007,25059,00096,000131,30044,70043,50069,300III. Income Statement PreparationUse the information from problem II above to prepare an income statement for Randa Company(a manufacturer). Assume that its cost of goods manufactured is $546,390.IV. Inventory computation and reportingShown here are annual financial data at December 31, 2013, taken from two differentcompanies.PinnacleRetailBeginning inventoryMerchandiseFinished goodsCost of purchasesCost of goods manufacturedEnding inventoryMerchandiseFinished goodsSlope BoardManufacturing$150,000$300,000250,000586,000100,000200,0001. Compute the cost of goods sold section of the income statement at December 31, 2013,for each company. Include the proper date, title and format in the solution.2. Write a half-page memorandum to your instructor (a) identifying the inventory accountsand (b) describing where each is reported on the income statement and balance sheetfor both companies.V. Analysis of cost flowsAs of the end of June, the job cost sheets at Racing Wheels, Inc. show the following total costsaccumulated on three custom jobs:Job 102 was started in production in May and the following costs were assigned to it inMay: direct materials, $12,000; direct labor, $3,600; and overhead, $1,800.Jobs 103 and 104 are started in June. Overhead cost is applied with a predeterminedrate based on direct labor cost.Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July.No raw materials are used indirectly in June.Using this information, answer the following questions. (Assume this company’s predeterminedoverhead rate did not change across these months).1. What is the cost of the raw materials requisitioned in June for each of the three jobs?What is the total cost of raw materials requisitioned for June?2. How much direct labor cost is incurred during June for each of the three jobs? What istotal direct labor cost incurred in June?3. What predetermined overhead rate is used during June? How much total cost istransferred to finished goods during June?VI. Cost flows in a job order cost systemThe following information is available for Lock-Down Company, which produces special-ordersecurity products and uses a job order cost accounting system.Complete the following amounts for the month of May.1. Cost of direct materials used.2. Cost of direct labor used.3. Cost of goods manufactured.4. Cost of goods sold.*5. Gross profit.6. Overapplied or underapplied overhead.*Do not consider any underapplied or overapplied overhead.VII. Journal Entries for Materials, Labor, and OverheadUse information from Problem VI to prepare journal entries for the following events for themonth of May. Remember that a journal entry must debit at least one account and credit at leastone account. Please use proper account titles.1.2.3.4.Raw materials purchased for cash.Direct materials usage.Indirect materials usage.Factory payroll costs Paid in cash.5. Direct labor usage.6. Indirect labor usage.7. Factory overhead excluding indirect materials and indirect labor (record credit to OtherAccounts).8. Application of overhead to goods in process.9. Allocation of overapplied or underapplied overhead to Cost of Goods Sold.VIII. Factory Overhead Calculation, Allocation, and AnalysisRed Wing Company applies factory overhead based on direct labor costs. The companyincurred the following costs during 2013: direct materials costs, $637,500; direct labor costs,$2,500,000; and factory overhead costs applied, $1,000,000.1. Calculate the predetermined overhead rate for year 2013.2. Assuming that the company’s $57,000 ending Goods in Process Inventory account foryear 2013 had $18,000 of direct labor costs; determine the inventory’s direct materialscosts.3. Assuming that the company’s $337,485 ending Finished Goods Inventory account foryear 2013 had $137,485 of direct materials costs, determine the inventory’s(a). direct labor costs and(b). its overhead costs.