HANDOUT 2 CHAPTER4 JOB COSTING Job costing, journal entries. At the end of 2017
ID: 2340588 • Letter: H
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HANDOUT 2 CHAPTER4 JOB COSTING Job costing, journal entries. At the end of 2017 Peerless Manufacturing Company's accountant estimated that the company will incur total manufacturing ove work 20,000 hours in 2018. The factory uses direct labor hours as its cost allocation base. The company's tax rate is 20%. Required: 1. Calculate the budgeted manufacturing overhead rate (predetermined factory overhead rate) for 2018 rhead costs of $120,000 and its assembly line workers will 2. Prepare Journal entries for the following transactions and post to T-accounts in the general ledger. a). 08/07/2018 Purchased on credit 3,100 pounds of raw materials at S10 per pound. b). 08/11/2018 Raw materials requisitioned and issued to production: 1,650 pounds for Job #8 at S10 per pound 1,225 pounds for Job #9 at $10 per pound c). 08/15/2018 worked l ,020 direct labor hours on Job #8 at a rate of S14 per hour, and 400 hours on d) 08/16/2018 e). 08/16/2018 f). 08/17/2018 Job #9 at a rate of $12 per direct labor hour. Calculate the factory overhead to be allocated to Jobs #8 and #9 in August. Prepare the journal entry to allocate factory overhead to Jobs #8 and #9. The company completed Job #8 for 820 units. Determine the total and unit cost of this job. words l Type here to searchExplanation / Answer
Date format is DD-MM-YY.
Peerless manufacturing Company
Individual Job sheet
Job
Job 8
Job 9
Total
Beginning Work in progress
Direct material
0
Direct labor
0
Applied overhead
0
Beginning work in progress
0
0
0
During period
Direct material
16500
12250
28750
Direct labor
14280
4800
19080
Applied overhead
6120
2400
8520
Total cost added during period
36900
19450
56350
Total cost
36900
19450
56350
Unit cost (36900/820)
$ 45.00
Status
Finished goods (sold)
In progress
Cost included in
Cost of goods sold
Work in progress inventory
Peerless manufacturing Company
Journal entries
Date
Account title
Debit
Credit
07-08-18
Raw material inventory (3100*10)
31000
Account payable
31000
(To record Purchase of raw material inventory
11-08-18
Work in progress inventory (1650*10= 16500) (1225*10=12250) (16500+12250)
28750
Raw material inventory
28750
(To record Issue of raw material inventory into production process.)
15-08-18
Work in progress inventory (1020*14 =14280 ) (400*12 =4800) (14280+4800)
19080
Cash
19080
(To record direct labor Consumed.)
16-08-18
Work in progress inventory (1020*6=6120) (400*6=2400) (6120+2400)
8520
Manufacture overhead
8520
(To record Manufacture overhead Applied to Job.)
18-08-18
Finished goods inventory
36900
Work in progress inventory
36900
(To record completion of Finished goods inventory.)
20-08-18
Cost of goods sold
36900
Finished goods inventory
36900
(To record Finished goods Inventory.)
20-08-18
Account receivable (820*85)
69700
Sales Revenue
69700
(To record sales revenue.)
28-08-18
Manufacture overhead (550+5650+1000)
7200
Cash
7200
(To record Manufacture Overhead paid.)
28-08-18
Manufacture overhead
2000
Accumulated depreciation -equipment
2000
(To Depreciation on factory equipment.)
30-08-18
Salaries expense
3500
Office supplies expense
200
Wages payable
3500
Account payable
200
(To record salaries expense and wages expense.)
30-08-18
Depreciation expense
1000
Accumulated depreciation -equipment
1000
(To Depreciation on office equipment.)
31-08-18
Manufacture overhead
1,320
Cost of goods sold
1320
(To record over applied of manufacture overhead.)
31-08-18
Interest expense
50
Interest payable
50
(To record accrue interest.)
.
Estimated manufacturing overhead
120000
Direct labor hours
20000
Overhead applied rate per labor hour (120000/20000)
$ 6.00
Actual Manufacture overhead incurred (550+5650+1000+2000)
7200
Less: Manufacture overhead Applied
8520
Under (Over) applied of overhead
(1,320)
Do not use minus sign
Peerless manufacturing Company
Schedule of Cost of goods manufactured
Direct material
28750
Direct labor
19080
Applied overhead
8520
Total manufacturing cost
56350
Add: beginning work in progress
0
Total cost of work in progress
56350
Less: ending work in progress (Job 9)
19450
Cost of goods manufactured
36900
Peerless manufacturing Company
Schedule of Cost of goods Sold
Cost of goods manufactured
36900
Add: Beginning Finished goods Inventory
0
Inventory available for sale
36900
Less: ending Finished goods Inventory
0
Cost of goods Sold
36900
Less: (Over) applied of overhead
(1,320)
Adjusted Cost of goods Sold
35580
Peerless manufacturing Company
Income statements
Sales revenue
69700
Less: cost of goods sold (adjusted)
35580
Gross margin
34120
Less: operating expense
Salaries expense
3500
Office supplies expense
200
Depreciation expense
1000
Total operating expense
4700
Operating profit
29420
Less: interest expense
50
Net income
29370
Date format is DD-MM-YY.
Peerless manufacturing Company
Individual Job sheet
Job
Job 8
Job 9
Total
Beginning Work in progress
Direct material
0
Direct labor
0
Applied overhead
0
Beginning work in progress
0
0
0
During period
Direct material
16500
12250
28750
Direct labor
14280
4800
19080
Applied overhead
6120
2400
8520
Total cost added during period
36900
19450
56350
Total cost
36900
19450
56350
Unit cost (36900/820)
$ 45.00
Status
Finished goods (sold)
In progress
Cost included in
Cost of goods sold
Work in progress inventory
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