Question

Bluebird Tire manufactures tires for​ all-terrain vehicles.

BluebirdBluebird

uses job costing and has a perpetual inventory system. On

NovemberNovember

​22,

BluebirdBluebird

received an order for

170170

TX tires from ATV Corporation at a price of

$ 75$75

each. The​ job, assigned number​ 298, was promised for

DecemberDecember

10. After purchasing the​ materials,

BluebirdBluebird

began production on

NovemberNovember

30 and incurred the following direct labor and direct materials costs in completing the​ order:

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​(Click the icon to view the​ costs.)

BluebirdBluebird

allocates manufacturing overhead to jobs on the basis of the relation between expected overhead costs

​($ 396 comma 000$396,000​)

and expected direct labor hours

​(18 comma 00018,000​).

Job 298 was completed on

DecemberDecember

3 and shipped to ATV on

DecemberDecember

5.Read the requirements

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.

Requirement 1. Prepare a job cost record for Job 298.

Calculate the predetermined overhead​ rate, then apply manufacturing overhead to the job. Begin by identifying the formula and computing the predetermined overhead rate.

Estimated yearly overhead costs

/

Estimated yearly direct labor hours

=

Predetermined overhead rate

$396,000

/

18,000

=

$22

per hour

Complete the job cost record in order of direct​ materials, direct​ labor, and allocated manufacturing overhead. Then prepare the overall cost summary. ​(List the dates in chronological order. Enter the labor time records in the correct row according to date. Complete only necessary answer boxes. If a box is not used in the table leave the box​ empty; do not enter a​ zero.)

Job Cost Record
Job No.	298
Customer Name		ATV Corporation
Job Description		170 TX tires
Date Promised 12-10
	Direct Materials
	Requisition
Date	Number	Amount
20XX
11–30	437	$720
12–2	439	400
12–3	501	1,400
Totals		$2,520

Date Started 11-30
Direct Labor
Labor Time
Record
Number	Amount
1896	$216
1904	480
	$696

Date Completed 12-3
Manufacturing Overhead Allocated
Date	Rate		Amount
12–3		per
	direct labor hr.
Overall Cost Summary
Direct Materials
Direct Labor
Manufacturing Overhead
Allocated
Total Job Cost

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Data Table

Date	Labor Time Record No.	Description	Amount
11/30	1896	12 hours at $18		$216
12/3	1904	30 hours at $16		$480

	Materials
	Requisition
Date	No.	Description	Amount
11/30	437	60 lbs. rubber at $12	$720
12/2	439	40 meters polyester fabric at $10	$400
12/3	501	100 meters steel cord at $14	$1,400

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Requirements

1.	Prepare a job cost record for Job 298.
2.	Calculate the total profit and the​ per-unit profit for Job 298.

Answer 1

Req. 1

Job Cost Record
JOB NO. 298 CUSTOMER NAME AND ADDRESS ATV Corporation JOB DESCRIPTION 170 TX tires
DATE PROMISED 12-10				DATE STARTED 11-30		DATE COMPLETED 12-3
DATE		DIRECT MATERIALS		DIRECT LABOR		MANUFACTURING OVERHEAD ALLOCATED
		REQUISITION NO.	AMOUNT	LABOR TIME RECORD NO.	AMOUNT	DATE		RATE	AMOUNT
20	XX
11	30	437	$720	1896	$216	12	3	$22 per direct
12	2	439	400					labor houra	$924
	3	501	1,400	1904	480	OVERALL COST SUMMARY
						DIRECT MATERIALS.………...			$2520
						DIRECT LABOR............………			696
						MANUFACTURING OVERHEAD ALLOCATED…...			924
Totals			$2520		$696	TOTAL JOB COST.......…..			$4140

aPredetermined	=	$396,000	=	$22 per direct labor hour
mfg. overhead rate		18000
Overhead allocated	=	(12 hrs + 30 hrs) × $22 per DL hour		=	$924

Req. 2

	Job 298
Sales ($75 × 170 tires)	$ 12750
Less cost of job (from Req. 1)	4140
Total profit on job	$ 8610
Divide by number of tires	÷ 170
Per-unit profit	$ 50.65