(b) Job Cost sheet (c) Journal Entries for Job Order Costing: (d) (e) (f) (g) Ba

Question

(b)

Job Cost sheet

(c) Journal Entries for Job Order Costing:

(d)

(e)

(f)

(g)

Balance of Finished Goods Inventory account (a month end) =

(h)

Underapplied Overhead =

Item Job 50 Job 51 Job 52 Opening WIP       Total Costs assigned durimg the year Total Problem 16-1A (Part Level Submission) Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 23,400, direct labor $ 14,040, and manufacturing overhead $ 18,720. As of January 1, Job No. 49 had been completed at a cost of $ 105,300 and was part of finished goods inventory. There was a $ 17,550 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52 and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $142,740 and $ 184,860, respectively. The following additional events occurred during the month 1. Purchased additional raw materials of $ 105,300 on account. 2. Incurred factory labor costs of $ 81,900. Of this amount $ 18,720 related to employer payroll taxes. 3. Incurred manufacturing overhead costs as follows: indirect materials $ 19,890 ; indirect labor $ 23,400 depreciation expense on equipment $ 14,040 ; and various other manufacturing overhead costs on account $ 18,720. Assigned direct materials and direct labor to jobs as follows. 4. Job No. 50 51 52 Direct Materials Direct Labor 11,700 45,630 35,100 5,850 29,250 23,400 Calculate the predetermined overhead rate for 2017, assuming Lott Company estimates total manufacturing overhead costs of $982,800, direct labor costs of $819,000, and direct labor hours of 23,400 for the year. (Round answer to the nearest whole percent, e.g. 25%.) Predetermined overhead rate

Explanation / Answer

a) Predetermined Overhead Rate ;-

= (Estimated Total Manufacturing Overhead Costs / Estimated direct labor costs)*100

= $982800 / $819000

= 120%

b) Cost Sheet :-

c) Journal Entries :-

Particulars Job 50 Job 51 Job 52 Opening WIP $56160 Total Cost Assigned During the year :- Direct Materials $11700 $45630 $35100 Direct Labor $5850 $29250 $23400 Manufacturing Overhead (Direct Labor Cost * 120%) $7020 $35100 $28080 Total Cost of Completed Job $80730 $109980 $86580

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