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In: Accounting

Technology Co. manufactures DVDs for computer software and entertainment companies. TrueTrue uses job order costing. On...

Technology Co. manufactures DVDs for computer software and entertainment companies.

TrueTrue

uses job order costing. On

NovemberNovember

​2,

TrueTrue

began production of

5 comma 7005,700

​DVDs, Job​ 423, for

DioramaDiorama

Pictures for

$ 1.40$1.40

sales price per DVD.

TrueTrue

promised to deliver the DVDs to

DioramaDiorama

Pictures by

NovemberNovember

5.

TrueTrue

incurred the following direct​ costs:

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​(Click the icon to view additional​ information.)Read the requirements

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.

Requirement 1. Prepare a job cost record for Job 423. Calculate the predetermined overhead allocation rate​ (round to two decimal​ places); then allocate manufacturing overhead to the job.

Begin by determining the total amount of direct materials and direct labor incurred on the job.​ Next, calculate the predetermined overhead allocation rate and apply manufacturing overhead to the job.​ Lastly, compute the total cost of Job 423 and the cost per DVD.

Job Cost Record

Job No.

423

Customer Name

Diorama

Job Description

5,700 DVDs

Date Promised 11-5

Direct materials

Requisition

Date

Number

Amount

11–2

63

$372

11–2

64

725

11–3

74

126

Totals

Date Started 11-2

Direct labor

Labor Time

Record

Number

Amount

655

$160

656

300

Date Completed 11-3

Manufacturing overhead allocated

Date

Rate

Amount

11–2

120%

of direct

labor cost

Overall Cost Summary

Direct materials

Direct labor

Manufacturing overhead

Allocated

Total Job Cost

Cost per DVD

Requirement 2. Journalize in summary form the requisition of direct materials and the assignment of direct labor and the allocation of manufacturing overhead to Job 423. Wages are not yet paid. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

Start by journalizing the use of direct materials.

Date

Accounts

Debit

Credit

Nov. 3

Work-in-Process Inventory

Raw Materials inventory

1,220

​Next, journalize the use of direct labor.

Date

Accounts

Debit

Credit

Nov. 3

Work-in-Process Inventory

Wages Payable

Now journalize the allocation of overhead to Job 423.

Date

Accounts

Debit

Credit

Nov. 3

Accounts Receivable

Sales Revenue

Requirement 3. Journalize completion of the job and the sale of the

5 comma 7005,700

DVDs on account. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

Begin by preparing the entry to show the completion of the job.

Date

Accounts

Debit

Credit

Nov. 3

​Next, journalize the revenue portion of the sale of Job 423.

Date

Accounts

Debit

Credit

Nov. 3

​Finally, journalize the cost of goods portion of the sale.

Date

Accounts

Debit

Credit

Nov. 3

Data Table

Date

Labor Time Record No.

Description

Amount

11/02

655

10 hours @ $16 per hour

$160

11/03

656

20 hours @ $15 per hour

300

Materials

Requisition

Date

No.

Description

Amount

11/02

63

31 lbs. polycarbonate plastic @ $12 per lb.

$372

11/02

64

25 lbs. acrylic plastic @ $29 per lb.

725

11/03

74

3 lbs. refined aluminum @ $42 per lb.

126

Solutions

Expert Solution

1 Job cost record
Job No. 423
Customer name Diorama
Job description 5700 DVDs
Date promised 11-5 Date started 4-30 Date completed 5-3
Direct materials Direct labor Manufacturing overhead allocated
Date Requisition number Amount Labor time record number Amount Date Rate Amount
11-2. 63 372 11/02655 160 5/3. 120% of 575
11-2. 64 725 11/03656 300 direct labor cost (160+300)*125%
11-3. 74 126
Overall cost summary
Direct materials 1223
Direct labor 460
Manufacturing overhead allocated 575
Totals 1223 460 Total job cost 2258
2 Date Accounts Debit Credit
Nov 3. Work-in-Process Inventory 1223
Raw Materials inventory 1223
(Use of direct materials)
Nov 3. Work-in-Process Inventory 460
Wages Payable 460
(Use of direct labor)
Nov 3. Work-in-Process Inventory 575
Manufacturing overhead 575
(Allocation of overhead)
3 Date Accounts Debit Credit
Nov 3. Finished goods inventory 2258
Work-in-Process Inventory 2258
(Completion of the job)
Nov 3. Accounts Receivable (5700*1.40) 7980
Sales Revenue 7980
(Revenue portion of the sale of Job)
Nov 3. Cost of goods sold 2258
Finished goods inventory 2258
(Cost of goods portion of the sale)

ekkarill92 answered 2 years ago
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