Question
In: Accounting
CALIFORNIA COMPANY …. Uses job order costing. At the start of the year, January 1, the...
CALIFORNIA COMPANY
…. Uses job order costing. At the start of the year, January 1, the company had work-in-process which consisted of the following jobs and costs:
|
Job 1 |
Job 2 |
Job 3 |
|
|
Direct materials |
$ 1,600 |
$ 2,000 |
$ 850 |
|
Direct labor |
1,900 |
1,200 |
900 |
|
Applied overhead |
1,710 |
1,080 |
810 |
During the first quarter 3 more jobs were started – Job 4, Job 5 and Job 6. The following cost information is available for costs incurred during the month of January:
|
Job 1 |
Job 2 |
Job 3 |
Job 4 |
Job 5 |
Job 6 |
|
|
Direct materials |
1,800 |
1,735 |
6,550 |
4,500 |
1,300 |
600 |
|
Direct labor |
1,000 |
1,400 |
4,200 |
1,800 |
800 |
860 |
During the quarter, jobs 1, 3, 4 and 6 were all completed. In addition, Jobs 3 and 6 were sold before the end of the quarter.
The company uses normal costing and closes under- and over-applied overhead directly to Cost of Goods Sold. There was no finished-goods inventory at the start of the period. Selling and administrative expenses totaled $3,986 for the quarter. Actual overhead for the quarter totaled $19,000. The company had no other non-operating gains or losses. Assume a tax rate of 35%.
Required:
- The company applies overhead based on direct labor cost – compute the predetermined overhead rate.
- Set up summary work in process T-accounts and job cost sheets for each job for the first quarter.
- Post all first quarter costs to the summary work in process AND individual job cost sheets. When posting, make sure you do a total column for each cost element and ONLY POST TOTALS to the general ledger T accounts.
- Calculate the ending balance for each job as of March 31.
- Calculate the ending balance in work-in process as of March 31.
- Calculate the cost of goods manufactured for the quarter.
- Calculate the normal (unadjusted) cost of goods sold for the quarter. Calculate the adjusted cost of goods sold. WHY are they different? Why do we need both? What is the reason for the normal cost of goods sold?
- During the quarter, did finished goods inventory increase or decrease AND by how much? WHY?
- Compute the over/underapplied overhead for the quarter.
- Assuming that the company prices its jobs at full cost plus 50%, calculate the sales revenue for the quarter.
- Prepare an income statement for the first quarter.
- WHY would the company use normal costing versus actual costing?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year,...
Ravsten Company uses a job-order costing system. On January 1,
the beginning of the current year, the company’s inventory balances
were as follows:
Raw materials
$
25,500
Work in process
$
13,800
Finished goods
$
31,900
The company applies overhead cost to jobs on the basis of
machine-hours. For the current year, the company estimated that it
would work 37,900 machine-hours and incur $151,600 in manufacturing
overhead cost. The following transactions were recorded for the
year:
a.
Raw materials...
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year,...
Ravsten Company uses a job-order costing system. On January 1,
the beginning of the current year, the company’s inventory balances
were as follows:
Raw materials
$
17,500
Work in process
$
9,760
Finished goods
$
29,280
The company applies overhead cost to jobs on the basis of
machine-hours. For the current year, the company estimated that it
would work 36,300 machine-hours and incur $159,720 in manufacturing
overhead cost. The following transactions were recorded for the
year:
a.
Raw materials...
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year,...
Ravsten Company uses a job-order costing system. On January 1,
the beginning of the current year, the company’s inventory balances
were as follows:
Raw materials
$
17,500
Work in process
$
9,760
Finished goods
$
29,280
The company applies overhead cost to jobs on the basis of
machine-hours. For the current year, the company estimated that it
would work 36,300 machine-hours and incur $159,720 in manufacturing
overhead cost. The following transactions were recorded for the
year:
a.
Raw materials...
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year,...
Ravsten Company uses a job-order costing system. On January 1,
the beginning of the current year, the company’s inventory balances
were as follows:
Raw materials
$
16,500
Work in process
$
10,200
Finished goods
$
30,100
The company applies overhead cost to jobs on the basis of
machine-hours. For the current year, the company estimated that it
would work 36,100 machine-hours and incur $155,230 in manufacturing
overhead cost. The following transactions were recorded for the
year:
Raw materials were...
Overhead Application and Job-Order Costing Heurion Company is a job-order costing firm that uses a plantwide...
Overhead Application and Job-Order Costing
Heurion Company is a job-order costing firm that uses a
plantwide overhead rate based on direct labor hours. Estimated
information for the year is as follows:
Overhead
$789,000
Direct labor hours
100,000
Heurion worked on five jobs in July. Data are as follows:
Job 741
Job 742
Job 743
Job 744
Job 745
Balance, July 1
$29,870
$55,215
$27,880
$0
$0
Direct materials
$25,500
$39,800
$14,450
$13,600
$8,420
Direct labor cost
$61,300
$48,500
$28,700
$24,500...
Happy Company is a manufacturing firm that uses job-order costing. At the beginning of the year,...
Happy Company is a manufacturing firm that uses job-order
costing. At the beginning of the year, the company's account
balances were as follows: Cash 1,045,000
Accounts Receivable 8,000
RM Inventory 26,000
WIP Inventory 21,000
FG Inventory 39,000
Supplies 8,000
Prepaid Insurance 3,000
Equipment 528,000
Accumulated Depreciation-Equipment 48,000
Accounts Payable 26,000
Common Stock, par $10 1,500,000
Retained Earnings 104,000
Total 1,678,000 1,678,000
The company applies overhead to jobs using a predetermined
overhead rate based on machine-hours. At the beginning of the...
Vaden Company is a manufacturing firm that uses job-order costing. At the beginning of the year,...
Vaden Company is a manufacturing firm that uses job-order
costing. At the beginning of
the year, the company’s inventory balances were as follows:
Raw materials
$39,000
Work in process
$49,000
Finished goods
$10,000
The company applies overhead to jobs using a predetermined
overhead rate based on
machine-hours. At the beginning of the year, the company
estimated that it would work
22,000 machine-hours and incur $264,000 in manufacturing
overhead cost. The
following transactions were recorded for the year:
i.
Raw materials...
Allenton Company is a manufacturing firm that uses job-order costing. At the beginning of the year,...
Allenton Company is a manufacturing firm that uses job-order
costing. At the beginning of the year, the company's inventory
balances were as follows: Raw materials $ 24,800 Work in process $
73,800 Finished goods $ 27,800 The company applies overhead to jobs
using a predetermined overhead rate based on machine-hours. At the
beginning of the year, the company estimated that it would work
45,800 machine-hours and incur $183,200 in manufacturing overhead
cost. The following transactions were recorded for the year:...
Alameda Products uses a job-order costing system. The company’s inventory balances on April 1, the start...
Alameda Products uses a job-order costing system. The company’s
inventory balances on April 1, the start of it’s fiscal year, were
as follows:
Raw Materials: $37,000
Work-in-Progress:$70,000
Finished Goods:$58,000
Manufacturing Overhead:$0
During the year the following occurred:
1.Raw materials purchased on account: $191,0002.
Raw materials issued from the storeroom for use in production:
$120,000
(80% direct materials and 20% indirect materials).
3.Employee salaries and wages paid in cash were as follows:
Direct Labor-$180,000; Indirect Labor: $66,000;
Selling, General and Administrative...
Hoover Inc. uses a job-order costing system. The company's inventory balances on February 1, the start...
Hoover Inc. uses a job-order costing system. The company's
inventory balances on February 1, the start of its fiscal year,
were as follows:
Raw Materials Inventory
$69,325
Work in Process Inventory
$55,100
Finished Goods Inventory
$81,256
During the year, the following transactions were completed:
Raw materials were purchased on account, $215,221.
Raw materials were issued from the storeroom for use in
production, $198,000 (70% direct and 30% indirect).
Employee salaries and wages were accrued as follows: direct
labor, $243,300; indirect...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- At week 24 of a project to shoot a television commercial what should the expenditures be?...
- Explain whether acid can catalyze each of the following reactions; i.e., whether the reaction is faster...
- Questions: How does Andrew Carnegie justify the contrast between the wealthy and the working poor? Provide...
- As you go through your daily activities, look for examples of people engaged in conflict. You...
- Summarize key functions of managements in your own words (Planning, Organizing, Leading and Controlling) Please don't...
- For college physics. Please write in paragraph form, typed. Thanks! Respond to the following: In your...
- What is the difference between a bitmap image and a vector image? In terms of processing...
ADVERTISEMENT