The University of Chicago Press is wholly owned by the university. It performs the bulk of its work for other university departments, which pay as though the press were an outside business enterprise. The press also publishes and maintains a stock of books for general sale. The press uses normal costing to cost each job. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead, allocated on the basis of direct manufacturing labor costs). The following data (in thousands) pertain to 2014:

Direct materials and supplies purchased on credit $800

Direct materials used 710

Indirect materials issued to various production departments 100

Direct manufacturing labor 1,300

Indirect manufacturing labor incurred by various production departments 900

Depreciation on building and manufacturing equipment 400

Miscellaneous manufacturing overhead incurred by various production departments (ordinarily detailed as repairs, photocopying, utilities, etc.) 550

Manufacturing overhead allocated at 160% of direct manufacturing labor costs?

Cost of goods manufactured 4,120

Revenues 8,000

Cost of goods sold (before adjustment for under- or over-allocated manufacturing overhead) 4,020

Inventories, December 31, 2013 (not 2014): Materials Control 100 Work-in-Process Control 60 Finished Goods Control 500

1. Prepare an overview diagram of the job-costing system at the University of Chicago Press.

2. Prepare journal entries to summarize the 2014 transactions. As your final entry, dispose of the year-end under- or over-allocated manufacturing overhead as a write-off to Cost of Goods Sold. Number your entries. Explanations for each entry may be omitted.

3. Show posted T-accounts for all inventories, Cost of Goods Sold, Manufacturing Overhead Control, and Manufacturing Overhead Allocated.

4. How did the University of Chicago Press perform in 2014?

please find the answer below

Explanation:

The University of Chicago

a job costing system involves the process of accumulating information about the costs associated with a specific production or service job service. This information may be required in order to submit the cost information to a customer under a contract where costs are reimbursed.

This involves the accumulation of the costs of materials, labor, and overheads for a specific job.

How to calculate job costing:

Total job cost= direct materials + direct labor + applied overhead

Calculate labor costs:

Determine how much it cost your organization to hire all workers who will work on the project. Multiple the pay per day rate by the number of workers you have estimate to have.

Calculate material costs:

Calculate the cost of all materials that will be used on the job.

Estimate applied overhead:

This is the most difficult to determine, you will need to determine the total overhead costs factoring into the project. This will include your rental expense for the office as well as administrative costs and depreciation of all equipment used.

1.Overview diagram

Indirect Cost Pool    

   Cost allocation base  

   Cost Objects: Print jobs  

     Direct tracing  

2.Materials Inventory Control    800

Accounts Payable Control      800  

To record purchase of direct materials & supplies

Work-in-Process Inventory Control  710  

Manufacturing Overhead Control  100  

Materials Inventory Control      810

To record direct materials and supplies used

Work-in-Process Inventory Control  1,300

Manufacturing Overhead Control  900  

Wages Payable        2,200  

To record manufacturing labor

Manufacturing Overhead Control  400  

Accumulated Depreciation – Building    400

 and Manufacturing Equipment

To record depreciation of building and manufacturing equipment

Manufacturing Overhead Control  550  

miscellaneous accounts      550  

To record miscellaneous factory overhead

Work-in-Process Inventory Control  2,080  

Applied Manufacturing Overhead      2,080

To assign manufacturing overhead to WIP based on DML dollars

Finished Goods Inventory Control  4,120  

Work-in-Process Inventory Control    4,120  

To record the cost of goods manufactured

Accounts Receivable Control or Cash  8,000  

Sales Revenues        8,000  

To record sales revenue  

Cost of Goods Sold    4,020

Finished Goods Inventory Control    4,020  

To record the costs of the goods sold ($1,300X 160%)

3.T-Accounts:

DIRECT MATERIALS

OPENING BALANCE$100  WORK-IN-PROCESS$710

CASH    $800  

WOR-IN-PROCESS

OPENING BALNCE$60  FINISHED GOODS  $4, 120

DIRECT MATERIALS  $710  CLOSING BALANCE  $30

APPLIED MANUFACT-$2, 080

URING OVERHEAD

MAUFACTURING O/H$1, 300        

 $4, 150    $4, 150

FINISHED GOODS

OPENING BALANCE$500  COST OF GOODS SOLD $4, 020

WORK-IN-PROCESS$4, 120  CLOSING BALANCE  $600

 $4, 620    $4, 620

 COST OF GOODS SOLD

FINISHED GOODS$4, 020  PROFIT/LOSS  $4, 020

 MANUFACTURING OVERHHEADS

INVENTORY CONTROL$710  WOR-IN-PROCESS $2, 560

WAGES PAYABLE  $900

ACCUMULATED  $400

DEPRECIATION  

MISCELLANEOUS$550

ACCOUNTS  

 $2, 560      $2, 560

(1) in the diagram, the manufacturing overhead is from indirect cost pool, direct manufacturing labour cost is from under cost allocation base,indirect and direct cost is from under cost object and direct materials and direct manufacturing labour is from under direct cost (2) journal entry total Dr : $25,060, Cr total $25,060 (3) materials inventory controlbalance c/d $90, work in process inventory control balance c/d $2,050, finished good inventory control balance c /d $600 (4) The university of Chicago press performed well in the period under review

Explanation:

Indirect cost pool. Manufacturing overhead

|

Cost Allocation Base. Direct manufacturing

Labour cost

|

Cost object. Allocated manufacturing overhead cost

Direct cost

|

Direct cost. Direct materials, Direct manufmanufacturing Labour

In this diagram, the manufacturing overhead is from indirect cost pool, direct manufacturing labour cost is from under cost allocation base, indirect and direct cost is from under cost object and direct manufacturing labour is from under direct cost

(2)

Journal entry will be

Dr: materials inventory control $800, Cr : Account payable control to record purchase of direct materials $800

Dr : work in process inventory control $710, manufacturing overhead $100, Cr: materials inventory control $810

Dr: work in process inventory control $1,300, manufacturing overhead control $900,Cr : wages payable $2,200 to record manufacturing labour

Dr: Manufacturing overhead control $400,Cr : Accumulated depreciation building and manufacturing equipment $400 to record depreciation of building and equipment

Dr: Manufacturing overhead control $550,Cr : miscellaneous account $550 to record miscellaneous factory overhead

Dr: work in process inventory control $2,080, Cr : Applied manufacturing overhead $2,080 to assign manufacturing overhead to work in process based on direct manufacturing labour

Dr:Finished goods inventory control $4,120,Cr: work in process control $4,120

Dr: Account Receivable inventory control or cash $8,000, Cr : Sales revenue $8,000 to record sales revenue

Dr: Cost of good sold $4,020, Cr: Finished good Inventory control $4,020 to record the cost of good sold

Dr: Applied manufacturing overhead $2,080, Cr: manufacturing overhead control $1,950, cost of good sold $130 to adjust for over application of manufacturing overhead

(3) The T Account is as follows

Materials inventory control

Dr. Cr

$ $

Material control 100. Materials inventory 810

Direct materials purchase 800. Balance c/d 90

900. 900

Work in process inventory control

Dr. Cr

$ $

Work in process control 60. Finished good Inventory 4,120

Work in process inventory control 710

Direct materials Labour. 1,300

Balance c/d 2,050

4,120. 4,120

Finished good Inventory control

Dr. Cr

$ $

Finished good control 500. Under or over allocated overhead 4,020

Cost of good manufactured 4,120. Balance c/d 600

4,620. 4,620

(4) in the period under review, the university of Chicago performed well.