This is from the website WCP2 Water ways has two major public-park projects to p
ID: 2367239 • Letter: T
Question
This is from the website
WCP2 Water ways has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain which will require special-order sprinkler head to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December 2010. Raw materials were requisitioned from the company's inventory on December 2 for $5,061; on December 8 for $1,059; and on december 14 for $3,459. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. The predetermined overhead rate is based on machine hours. The expected machine hours use for the year is 2,112 hours, and the anticipated overhead costs are $840,576 for the year: The machine were used by workers on projects K52 and J57 on December 3, 9, and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hours special orders were completed on December 15. producing 237 sprinkler heads for J57 and I42 sprinkler heads for K52. Additional job order activities during this period of time included: Set up the job costs sheets for Job No. J57 and Job No. K52. Determine the total cost for each manufacturing special order for these jobs.(Round unit cost to nearest cent.)Explanation / Answer
GENERAL LEDGER
YEAR
TRANSACTION DETAIL
GL
REF.
DEBIT
CREDIT
MONTH
DAY
Dec.
1
Raw Material Inventory
1
53200
Accounts Payable
2
53200
( Purchased Raw Material From D.S. Company )
Dec.
2
Other Jobs Direct Material
3
40000
Raw Material Inventory
1
40000
( Allocation of Direct Material to other jobs)
Dec.
2
Other Jobs Indirect Material
4
3000
Raw Material Inventory
1
3000
( Allocation of indirect Material to other jobs)
Dec.
2
Direct Materials for jobs J57 and K52
3
5061
Raw Material Inventory
1
5061
(Allocation of Direct Material to jobs J57 & K52)
Dec.
3
Direct labour for J57 and K52
5
99
Labour cost
6
99
( allocation of 18 hrs tojobs J57 and K52 )
Dec.
8
Direct Materials for jobs J57 and K52
3
1059
Raw Material Inventory
1
1059
(Allocation of Direct Material to jobs J57 & K52)
Dec.
9
Direct labour for J57 and K52
5
99
Labour cost
6
99
( allocation of 18 hrs tojobs J57 and K52 )
Dec.
12
Waterways’ salary and wages expense
7
65000
Cash
8
65000
( Paid outstanding salaries and Wages)
Dec.
13
Water bill expenses
9
9000
Cash
8
9000
(paid water bill)
Dec.
14
Direct Materials for jobs J57 and K52
3
3459
Raw Material Inventory
1
3459
(Allocation of Direct Material to jobs J57 & K52)
Dec.
15
Direct labour for J57 and K52
5
99
Labour cost
6
99
( allocation of 18 hrs tojobs J57 and K52 )
Dec.
18
Other Completed jobs WIP
10
50000
Finished Goods cost
11
50000
(Transfer of costs: other jobs to finished good)
Dec.
21
Electricity bill expenses
12
12000
Cash
8
12000
(paid electrcity bill)
Dec.
31
Property tax Expense
13
12000
Accrued Property Taxes
14
12000
(Adjusting Entry)
Dec.
31
Prepaid Insurance Expense
15
8800
Prepaid Insurance
16
8800
(Adjusting Entry)
Dec.
31
Depreciation Expense
17
16000
Accumulated Depreciation
18
16000
(Adjusting Entry)
The third row each transaction explains the transaction.
Convention used is:
Expenses follow convention of assets
If asset increases, implies debit side entry and if it decreases then credit side entry
It is the reverse for liabilities. Here Accounts payable is a liability
GENERAL LEDGER
YEAR
TRANSACTION DETAIL
GL
REF.
DEBIT
CREDIT
MONTH
DAY
Dec.
1
Raw Material Inventory
1
53200
Accounts Payable
2
53200
( Purchased Raw Material From D.S. Company )
Dec.
2
Other Jobs Direct Material
3
40000
Raw Material Inventory
1
40000
( Allocation of Direct Material to other jobs)
Dec.
2
Other Jobs Indirect Material
4
3000
Raw Material Inventory
1
3000
( Allocation of indirect Material to other jobs)
Dec.
2
Direct Materials for jobs J57 and K52
3
5061
Raw Material Inventory
1
5061
(Allocation of Direct Material to jobs J57 & K52)
Dec.
3
Direct labour for J57 and K52
5
99
Labour cost
6
99
( allocation of 18 hrs tojobs J57 and K52 )
Dec.
8
Direct Materials for jobs J57 and K52
3
1059
Raw Material Inventory
1
1059
(Allocation of Direct Material to jobs J57 & K52)
Dec.
9
Direct labour for J57 and K52
5
99
Labour cost
6
99
( allocation of 18 hrs tojobs J57 and K52 )
Dec.
12
Waterways’ salary and wages expense
7
65000
Cash
8
65000
( Paid outstanding salaries and Wages)
Dec.
13
Water bill expenses
9
9000
Cash
8
9000
(paid water bill)
Dec.
14
Direct Materials for jobs J57 and K52
3
3459
Raw Material Inventory
1
3459
(Allocation of Direct Material to jobs J57 & K52)
Dec.
15
Direct labour for J57 and K52
5
99
Labour cost
6
99
( allocation of 18 hrs tojobs J57 and K52 )
Dec.
18
Other Completed jobs WIP
10
50000
Finished Goods cost
11
50000
(Transfer of costs: other jobs to finished good)
Dec.
21
Electricity bill expenses
12
12000
Cash
8
12000
(paid electrcity bill)
Dec.
31
Property tax Expense
13
12000
Accrued Property Taxes
14
12000
(Adjusting Entry)
Dec.
31
Prepaid Insurance Expense
15
8800
Prepaid Insurance
16
8800
(Adjusting Entry)
Dec.
31
Depreciation Expense
17
16000
Accumulated Depreciation
18
16000
(Adjusting Entry)
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