True Technology Co. manufactures CDs and DVDs for computer software and entertai
ID: 2539831 • Letter: T
Question
True Technology Co. manufactures CDs and DVDs for computer software and entertainment companies. True uses job order costing. On September 2, True began production of 5,000 DVDs, Job 423, for Paradigm Pictures for $ 1.80 sales price per DVD. True promised to deliver the DVDs to Paradigm Pictures by September 5. True incurred the following costs:
Date Labor Time Record No. Description Amount
9/02 655 10 hours @ $14 per hour $140
9/03 656 20 hours @$13 per hour $260
Date Materials Requisition No. Description Amount
9/02 63 31 lbs. Polycarbonate Plastic @ $12 per lb. $372
9/02 64 25 lbs. Acrylic Plastic @ $29 per lb. $725
9/03 74 31 lbs. Refined Aluminum @ $42 per lb. $126
1.
Prepare a job cost record for Job 423. Calculate the predetermined overhead allocation rate; then allocate manufacturing overhead to the job.
2.
Journalize in summary form the requisition of direct materials and the assignment of direct labor and the allocation of manufacturing overhead to Job 423. Wages are not yet paid.
3.
5 comma 0005,000
1.
Prepare a job cost record for Job 423. Calculate the predetermined overhead allocation rate; then allocate manufacturing overhead to the job.
2.
Journalize in summary form the requisition of direct materials and the assignment of direct labor and the allocation of manufacturing overhead to Job 423. Wages are not yet paid.
3.
Journalize completion of the job and the sale of the5 comma 0005,000
DVDs on account.Explanation / Answer
Part 1:
Raw materials
Plastic @12 per lb.
372
Plastic @29 per lb.
725
Aluminium @42 per lb.
126
1223
Labour
10 hours @14 per hour
140
20 hours 13 per hour
260
400
Overhead @10 per hour
300
(30 X 10)
Job cost
1923
Part 2:
Date
Accounts description and explanation
Debit ($)
Credit ($)
Raw materials
1223
Manufacturing overhead
400
Labour
300
To Accounts payable
1923
(Being the expenditures incurred)
Job 423
1923
Raw materials
1223
Labour
400
Manufacturing overhead
300
(Being allocation of costs to Job 423)
Part 3:
Date
Accounts description and explanation
Debit ($)
Credit ($)
Bank
9000
Job 423
1923
Profit on sale
7077
(Being profit on sale recorded)
Raw materials
Plastic @12 per lb.
372
Plastic @29 per lb.
725
Aluminium @42 per lb.
126
1223
Labour
10 hours @14 per hour
140
20 hours 13 per hour
260
400
Overhead @10 per hour
300
(30 X 10)
Job cost
1923
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