Ramblewood Manufacturing, Incorporated is a web-based computerized simulation of a job-order costing system with a subsidiary ledger of job cards for the Work-In-Process Inventory account. It uses a just-in-time inventory system. Direct labor is the cost driver that allocates manufacturing overhead. The manufacturing overhead is automatically allocated and recorded in the correct job card when the direct-labor cost is journalized. Students enter journal entries to purchase raw materials, record direct-labor costs, to transfer products from the Work-in-Process Inventory account to the Finished-Goods Inventory account, record sales, and dispose of the over applied or under applied manufacturing overhead.
This computerized practice set that requires the student to enter daily, adjusting, and closing entries for the last month of the third quarter of the fiscal year. The month is divided into four 7 day modules starting on September 3rd. At the end of each module, the students are required to print a trial balance and check their account balances against the “Check It Out Box”. This box contains the correct balances of several of the accounts that have had significant activity, or no activity during this data entry period. The students may use their general journal and check figures to verify their work and if necessary, locate any error/s and correct them. At the mid-point of the project, (end of module two) the students are required to print several documents and answer the Mid-Point Evaluation questions.
After completing Modules 3 and 4, the students will record the adjusting entries. The closing entries are completed automatically through the program. When the financial statements and selected documents are printed, the student can verify their work against the “Check It Out Box”, make corrections (if necessary), and use the documents to answer the Final Evaluation questions.
Students are required to analyze the resulting financial statements, reconcile allocated manufacturing overhead with actual manufacturing overhead, and answer questions about the flow of costs through a job-order costing system.
- The perpetual inventory system requires students to enter the inventory item numbers and number of units of the direct materials being purchased directly to the job cards (sheets). Job-order cards (sheets) are updated for direct labor and the allocation of manufacturing overhead. When jobs are sold, students transfer the data from the work-in-process account (and job cards) to the finished-goods inventory account.
- The last step in the accounting cycle, closing the General Ledger, is an automated process that requires the student to click on a “Close JE” button, and the closing entries are automatically recorded in the General Journal and posted to the General Ledger.
- The evaluation questions can be graded electronically and submitted to the instructor in printed form or e-mailed for recording. Key documents, such as the income statement and balance sheet, can be attached to the e-mail of the completed evaluation.