Lott Company uses a job order cost system and applies overhead to production on
ID: 2331120 • Letter: L
Question
Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,800, direct labor $ 12,480 and manufacturing overhead $16,640. As of January 1, Job 49 had been completed at a cost of $ 93,600 and was part of finished goods inventory. There was a$15,600 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 $126,880 and $164,320, respectively. The following additional events occurred during the month 1. Purchased additional raw materials of $93,600 on account 2. Incurred factory labor costs of $ 72,800. Of this amount $16,640 related to employer payroll taxes 3. Incurred manufacturing overhead costs as follows: indirect materials $17,680; indirect labor $ 20,800; depreciation expense on equipment $12,480; and various other manufacturing overhead costs on account $16,640 4. Assigned direct materials and direct labor to jobs as follows Job No 50 51 52 Direct Materials Direct Labor 10,400 40,560 31,200 $5,200 26,000 20,800Explanation / Answer
Solution:
Job No. 50
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Beg.
$20,800
$12,480
$16,640
Jan.
$10,400
$5,200
$6,240
$31,200
$17,680
$22,880
Cost of completed Job
Direct Materials
$31,200
Direct labor
$17,680
Manufacturing Overhead
$22,880
Total Cost
$71,760
Job No. 51
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan.
$40,560
$26,000
$31,200
$40,560
$26,000
$31,200
Cost of completed Job
Direct Materials
$40,560
Direct labor
$26,000
Manufacturing Overhead
$31,200
Total Cost
$97,760
Job No. 52
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan.
$31,200
$20,800
$24,960
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Job No. 50
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Beg.
$20,800
$12,480
$16,640
Jan.
$10,400
$5,200
$6,240
$31,200
$17,680
$22,880
Cost of completed Job
Direct Materials
$31,200
Direct labor
$17,680
Manufacturing Overhead
$22,880
Total Cost
$71,760
Job No. 51
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan.
$40,560
$26,000
$31,200
$40,560
$26,000
$31,200
Cost of completed Job
Direct Materials
$40,560
Direct labor
$26,000
Manufacturing Overhead
$31,200
Total Cost
$97,760
Job No. 52
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan.
$31,200
$20,800
$24,960
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