1. Ben10 Co. reports the following for its job order production activities for August: Raw Materials purchases $16,000 8,450 Direct Materials used Direct Labor 11,900 Indirect Materials Indirect Labor Other Factory Overhead Ben10's predetermined overhead rate is 150% of direct labor costs. Job cost sheet information for the three jobs worked on during August follows: Work in Process inventory, July 31 Direct Materials used (in July) Direct Labor used (in July) Overhead applied (July) Costs incurred in August Direct Materials used Direct Labor used 5,000 3,500 9,500 Overhead applied Status on August 31 Job401 $3,600 1,700 2,550 3,550 5,100 ? Finished/Sold Job402 3,500 6,000 ? Finished/Unsold Job403 1,400 800 ? In process Required: a. Determine the cost for factory overhead, both actual and applied, during August. Compute the amount of any over- or underapplied overhead on August 31. b. Compute the total cost of (1) each job as of August 31, (2) the August 31 inventories for both Work in Process and Finished Goods, and (3) the cost of goods sold for August. c. Prepare journal entries for the month to record each part i-vi: i. Materials purchases (on credit), direct materials used, direct labor used, and overhead applied. ii. Actual overhead costs, consisting of indirect materials, indirect labor, & other overhead costs paid in cash. iii. Transfer of each completed job to the Finished Goods Inventory account. vi. Record cost of goods sold. v. Record sale (on credit) of Job 401 for $35,000. vi Close any underapplied or overapplied overhead in Factory Overhead to Cost of Goods Sold
1. Ben10 Co. reports the following for its job order production activities for August: Raw Materials purchases $16,000 8,450 Direct Materials used Direct Labor 11,900 Indirect Materials Indirect Labor Other Factory Overhead Ben10's predetermined overhead rate is 150% of direct labor costs. Job cost sheet information for the three jobs worked on during August follows: Work in Process inventory, July 31 Direct Materials used (in July) Direct Labor used (in July) Overhead applied (July) Costs incurred in August Direct Materials used Direct Labor used 5,000 3,500 9,500 Overhead applied Status on August 31 Job401 $3,600 1,700 2,550 3,550 5,100 ? Finished/Sold Job402 3,500 6,000 ? Finished/Unsold Job403 1,400 800 ? In process Required: a. Determine the cost for factory overhead, both actual and applied, during August. Compute the amount of any over- or underapplied overhead on August 31. b. Compute the total cost of (1) each job as of August 31, (2) the August 31 inventories for both Work in Process and Finished Goods, and (3) the cost of goods sold for August. c. Prepare journal entries for the month to record each part i-vi: i. Materials purchases (on credit), direct materials used, direct labor used, and overhead applied. ii. Actual overhead costs, consisting of indirect materials, indirect labor, & other overhead costs paid in cash. iii. Transfer of each completed job to the Finished Goods Inventory account. vi. Record cost of goods sold. v. Record sale (on credit) of Job 401 for $35,000. vi Close any underapplied or overapplied overhead in Factory Overhead to Cost of Goods Sold
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:1. Ben10 Co. reports the following for its job order production activities for August:
Raw Materials purchases
$16,000
8,450
Direct Materials used
Direct Labor
11,900
Indirect Materials
5,000
3,500
9,500
Indirect Labor
Other Factory Overhead
Ben10's predetermined overhead rate is 150% of direct labor costs. Job cost sheet information for the three jobs
worked on during August follows:
Work in Process inventory, July 31
Direct Materials used (in July)
Direct Labor used (in July)
Overhead applied (July)
Costs incurred in August
Direct Materials used
Direct Labor used
Overhead applied
Status on August 31
Job401
$3,600
1,700
2,550
3,550
5,100
?
Finished/Sold
Job402
3,500
6,000
?
Finished/Unsold
Job403
1,400
800
?
In process
Required:
a.
Determine the cost for factory overhead, both actual and applied, during August. Compute the amount of any
over- or underapplied overhead on August 31.
b.
Compute the total cost of (1) each job as of August 31, (2) the August 31 inventories for both Work in Process
and Finished Goods, and (3) the cost of goods sold for August.
c. Prepare journal entries for the month to record each part i-vi:
i. Materials purchases (on credit), direct materials used, direct labor used, and overhead applied.
ii. Actual overhead costs, consisting of indirect materials, indirect labor, & other overhead costs paid in cash.
iii. Transfer of each completed job to the Finished Goods Inventory account.
vi. Record cost of goods sold.
v. Record sale (on credit) of Job 401 for $35,000.
vi. Close any underapplied or overapplied overhead in Factory Overhead to Cost of Goods Sold.
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