In January, Reyes Tool & Dye requisitions raw materials for production as follows: Job 1 $960, Job 2 $1,630, Job 3 $720, and general factory use $680. During January, time tickets show that the factory labor of $6,100 was used as follows: Job 1 $1,570, Job 2 $1,940 Job 3 $1,670, and general factory use $920. Prepare the job cost sheets for each of the three jobs. (If answer is zero, please enter 0, do not leave any fields blank.) Job 1 Date
Direct Materials
1/31 1/31
Direct Labor
960
0
0
1570 Job 2
Date
1/31
Direct Materials
Direct Labor
1630
0
0
1,940
1/31
Job 3 Date
1/31 1/31
Direct Materials
Direct Labor
720
0 1670
0
In March, Hollaway Company completes Jobs 10 and 11. Job 10 cost $28,110 and Job 11 $32,630. $3 2,630. On March 31, Job 10 is sold to the customer for $38,110 in cash. Journalize the entries for the completion of the two jobs and the sale of Job 10. Date
Mar. 31
Account/Description
Finished goods inventory
Debit
6 07 4 0
Work in process inventory
6 074 0
(To record completion of jobs.) Mar. 31
Cash
Credit
3 8 ,1 1 0
Sales
38,110
(To record sale of job.) Mar. 31
Cost of goods sold
28 1 1 0
Finished goods inventory
28 11 0
(To record cost of job.)
(a) + $50,000 + $42,500 = $155,650 (a) = $63,150 $155,650 + (b) = $201,500 (b) = $45,850 $201,500 - (c) = $192,300 (c) = $9,200 [Note: The instructions indicate that manufacturing overhead overhead is applied on the basis of direct labor cost, and the rate is the same in all cases. From Case A, a student should note the overhead rate to be 85%, or ($42,500 ÷ $50,000).] (d) = .85 × $120,000 (d) = $102,000 $83,000 + $120,000 + $102,000 = (e) (e) =$305,000 $305,000 + $15,500 = (f) (f) = $320,500 $320,500 - $11,800 = (g) (g) = $308,700 [Note: (h) and (i) ar e solved together.] (i) = .85(h) $63,150 + (h) + .85(h) = $213,000 1.85(h) = $149,850 (h) = $81,000 (i) = $68,850 (j) = $213,000 + $18,000 (j) = $231,000 $231,000 - (k) = $222,000 (k) = $9,000 Manufacturing cost data for Pena Company, which uses a job order cost system, are presented below. Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is the same. Case A Case B Case C Direct materials used
a $63,150
$ 83,000
$ 63,150
Direct labor
50,000
120,000
h 81,000
Manufacturing overhead applied
42,500
d 102,000
i 68,850
155,650
e 305,000
213,000
Total manufacturing costs
Work in process 1/1/10
b 45,850
15,500
18,000
Total cost of work in process
201,500
f 320,500
j 231,000
Work in process 12/31/10
c 9,200
11,800
k 9,000
Cost of goods manufactured
192,300
g 308,700
222,000
Easy Decorating uses a job order costing system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year. Budgeted overhead Actual overhead
$1,000,000 $779,550
Budgeted decorator hours
40,000
Actual decorator hours
30,750
The company uses Operating Overhead in pla ce of Manufacturing Overhead.
Correct.
Compute the predetermined overhead rate. $ 25
Correct.
Prepare the entry to apply the overhead for the year.
Account/Description
Debit
Work in process
Credit
76 8 75 0
Operating overhead
7 68 7 5 0
Correct.
Determine whether the overhead was under- or overapplied and by how much. $ 10800
Underapplied
P15-2A
For the year ended December December 31, 2010, the job cost sheets of DeVoe Company contained the following data.
Job Number Explanation 7640 Balance 1/1
Direct Materials $25,000
Direct Labor $24,000
Manufacturing Overhead $28,800
Total Costs $77,800
7641
Current year's costs Balance 1/1 Current year's costs Current year's costs
30,000 11,000 43,000 48,000
36,000 18,000 48,000 55,000
43,200 21,600 57,600 66,000
109,200 109,2 00 50,600 148,600 148,6 00 169,000
7642 Other data: 1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account. 2. Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000. 3. Job No. 7640 and Job No. 7641 were completed during the year. 4. Job Nos. 7638, 7639, and 7641 were sold on account for $530,000. 5. Manufacturing overhead incurred on account a ccount totaled $120,000. 6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $20,000, and depreciation on factory machinery $8,000.
Correct.
Prove the agreement of Work in Process Process Inventory with job cost sheets pertaining to unfinished work. Hint: Use a single T a ccount for Work in Process Inventory. Calculate each of the following, following, then post each to the th e T account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs. Work in Process Inventory
1/1
Balance
128400 Completed Work
Direct materials
121000
Direct labor
139000
Manufacturing overhead 166800
12/31 Balance
Work in process balance
169000
$ 169000
386200
Unfinished job No. 7642
$ 169000
Account/Description
Debit
Manufacturing overhead
4,800
Cost of goods sold
Credit
4,800
Actual overhead costs Incurred on account
$120,000
Indirect materials
14,000
Indirect labor
20,000
Depreciation
8,000 $162,000
Applied overhead costs Job 7640
$43,200
Job 7641
57,600
Job 7642
66,000
Actual overhead
$166,800 $162,000
Applied overhead
166,800 $4,800
Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold. Account/Description
Debit
Manufacturing overhead
4,800
Credit
Cost of goods sold
4,800
Determine the gross profit to be r eported for 2010. (List job numbers in ascending order of job number.) Sales
$530,000
Cost of goods sold Add:
Job 7638
$87,000
Job 7639
92,000
Job 7641
199,200
Less: Overapplied overhead Gross profit
378,200 4,800
373,400 $156,600
When raw materials are purchased, the Work in Process Process Inventory In ventory account is debited. False
True
Total manufacturing costs for a period consists of th e costs of direct materials used, the cost of dir ect labor incurred, and the manufacturing overhead applied during the period. False True
Process costing is not used when similar goods are being produced. jobs have distinguishing characteristics. large volumes are produced. a series of connected manufacturing processes is n ecessary. ecessary.
When a job is completed and all costs have been accumulated on a job cost sheet, the journal entry that should be made is Finished Goods Inventory
Work In Process Inventory Finished Goods Inventory Direct Materials Direct Labor Manufacturing Overhead Work In Process Inventory Direct Materials Direct Labor Manufacturing Overhead Raw Materials Inventory Work In Process Inventory
A materials requisition slip showed that direct materials requested were $53,000 and indirect materials requested were $9,000. The entry to r ecord the transfer of materials from the storeroom is
c d a b
Sportly, Inc. completed Job No. B14 during 2008. The job cost sheet listed the following: following:
Direct materials
$33,000
Direct labor
$18,000
Manufacturing overhead applied
$12,000
Units produced
3,000 units
Units sold
1,800 units
How much is the cost of the finished goods on hand from this job? $30,600 $63,000 $37,800 $25,200 When the company assigns factory labor costs to jobs, the direct labor cost is i s debited to Factory Labor. Work in Process Inventory. Direct Labor. Manufacturing Overhead.
In March, Hollaway Company completes Jobs 10 and 11. Job 10 cost $30,410 and Job 11 $32,310. On March 31, Job 10 is sold to the customer for $40,410 in cash. Journalize the entries for the completion of the two jobs and the sale of Job 10. Date
Mar. 31
Account/Description
Finished goods inventory
Debit
Credit
62 7 2 0
Work in process 62720
inventory (To record completion of jobs.) Mar. 31
Cash Sales (To record sale of job.)
40,410 40,410
Mar. 31
Cost of goods sold
30,410
Finished goods inventory (To record cost of job.) Click here if you would like to Show Work for this question
Q uestion Attempts: 1 of 1 used
30,410
