(12 points total) Traditional Job Costing: Superior Company\'s business includes

Question

(12 points total) Traditional Job Costing: Superior Company's business includes three large jobs, JV28, BY92 and ZF14. While these jobs are in process, their costs are accumulated in WIP inventory account. Once a job is completed, all the costs accumulated to date are transferred to COGS. This is the JE represented in 1g above. Use the information below to complete the Jobs Report provided below. Remember to show your work for partial credit. (2 points) Direct Material: Job JV28 used 40% of the company's Direct Material (amount from JE lb) Job BY92 used 12% and Job ZF14 use 22% the company's Direct Material. Use these percentages and calculate the Direct Material for each job. Include these amounts in the table below. The combined total for the three jobs WILL NOT agree to the total costs because Superior has other jobs they sold as well as jobs costs for each job as the percent given for each job times your total Direct Material from your JE in 1b. Include these amounts in the Jobs Report below. a) that are still in inventory. Calculate the Direct Material (2 points) Direct Labor: Job JV28 used 35% of the company's direct labor (amount from JE 1c). Job BY92 used 18% and Job ZF 14 used 20%. Calculate the Direct Labor dollars for each job and include them on the Jobs Report below b) (2 points) Each customer is charged a markup to Direct Material. Therefore, the percentage of direct material for each job given in 3a above can be used to allocate the total revenue (JE 1f to each job. Use the percentage of Direct Material to allocate the company's revenue to each job and include them in the Jobs Report below. (40%, 12% and 22% respectively) These amounts o) ent the amounts billedcharged to each customer during the period and cannot change.

Explanation / Answer

4a) Management should be concerned about Job BY92 about cost. The costs for the job are high resulting in lower Gross Margin.

4b) Management would want to produce and sell more of Job JV28 because this job has the highest Gross Margin of all the jobs.

Superior Company Job Report - Traditional Ref JV28 BY92 ZF14 Sales Revenue 3c)      438,800.00      131,640.00      241,340.00 1097000*40% 1097000*12% 1097000*22% Job Costs: Applied Overhead 3d)      116,200.00        59,760.00        66,400.00 332000*35% 332000*18% 332000*20% Direct Material 3a)      113,200.00        33,960.00        62,260.00 283000*40% 283000*12% 283000*22% Direct Labor 3b)        24,500.00        12,600.00        14,000.00 70000*35% 70000*18% 70000*20% Total Job Costs (3d+3a+3b) 3e)      253,900.00      106,320.00      142,660.00 Gross Margin (3c-3e) 3f)      184,900.00        25,320.00        98,680.00 Gross Margin % (3f/3c) 3g)                 42.14                 19.23                 40.89

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