Financial accounting Chapter 6: Job costing Steel Manufacturing uses a job order costingsystem. During one month, Steel purchased $188,000 of rawmaterials on credit; issued materials to the production of $215,000 ofwhich $10,000 were indirect. Steel incurred a factory payrollof $159,000, of which $20,000 was indirect labor. Steel uses apredetermined overhead rate of 150% of direct labor cost. The totalmanufacturing costs added during the period are_

Explanation of Job Order Costing System: A job order costing system is a method of cost accounting…

Answered: Chapter 6: Job costing Steel…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 1CMA: Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A...

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Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.
(Appendix 4A) Journal Entries, Job Costs The following transactions occurred during the month of April for Nelson Company: a. Purchased materials costing 4,610 on account. b. Requisitioned materials totaling 4,800 for use in production, 3,170 for Job 518 and the remainder for Job 519. c. Recorded 65 hours of direct labor on Job 518 and 90 hours on Job 519 for the month. Direct laborers are paid at the rate of 14 per hour. d. Applied overhead using a plantwide rate of 6.20 per direct labor hour. e. Incurred and paid in cash actual overhead for the month of 973. f. Completed and transferred Job 518 to Finished Goods. g. Sold on account Job 517, which had been completed and transferred to Finished Goods in March, for cost (2,770) plus 25%. Required: 1. Prepare journal entries for Transactions a through e. 2. Prepare job-order cost sheets for Jobs 518 and 519. Prepare journal entries for Transactions f and g. (Note: Round to the nearest dollar.) 3. Prepare a schedule of cost of goods manufactured for April. Assume that the beginning balance in the raw materials account was 1,025 and that the beginning balance in the work-in-process account was zero.
Job 19AB required 10,000 for direct materials, 4,000 for direct labor, 300 direct labor hours, 150 machine hours, three material moves, and five component parts. The cost pools and overhead rates for each pool follow: Determine the cost of Job 19AB using the ABC method.
Baxter Company has two processing departments: Assembly and Finishing. A predetermined overhead rate of 10 per DLH is used to assign overhead to production. The company experienced the following operating activity for April: a. Materials issued to Assembly, 24,000 b. Direct labor cost: Assembly, 500 hours at 9.20 per hour; Finishing, 400 hours at 8 per hour c. Overhead applied to production d. Goods transferred to Finishing, 32,500 e. Goods transferred to finished goods warehouse, 20,500 f. Actual overhead incurred, 10,000 Required: 1. Prepare the required journal entries for the preceding transactions. 2. Assuming Assembly and Finishing have no beginning work-in-process inventories, determine the cost of each departments ending work-in-process inventories.
Determining job costcalculation of predetermined rate for applying overhead by direct labor cost and direct labor hour methods Beemer Products Inc. has its factory divided into three departments, with individual factory overhead rates for each department. In each department, all the operations are sufficiently alike for the department to be regarded as a cost center. The estimated monthly factory overhead for the departments is as follows: Forming, 64,000; Shaping, 36,000; and Finishing, 10,080. The estimated production data include the following: The job cost ledger shows the following data for X6, which was completed during the month: Required: Determine the cost of X6. Assume that the factory overhead is applied to production orders, based on the following: 1. Direct labor cost 2. Direct labor hours (Hint: You must first determine overhead rates for each department, rounding rates to the nearest cent.)
JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD Eto Manufacturing had the following transactions during the month: (a) Purchased raw materials on account, 70,000. (b) Issued direct materials to Job No. 300, 25,000. (c) Issued indirect materials to production, 10,000. (d) Paid biweekly payroll and charged direct labor to Job No. 300, 8,000. (e) Paid biweekly payroll and charged indirect labor to production, 3,000. (f) Issued direct materials to Job No. 301, 20,000. (g) Issued indirect materials to production, 4,000. (h) Paid miscellaneous factory overhead charges, 6,000. (i) Paid biweekly payroll and charged direct labor to Job No. 301, 10,000. (j) Paid biweekly payroll and charged indirect labor to production, 2,000. REQUIRED Prepare general journal entries for transactions (a) through (j).
Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
Lorrimer Company has a job-order cost system. The following debits (credits) appeared in the Work-in-Process account for the month of June. During the month of June, direct labor totaled 30,000 and 24,000 of overhead was applied to production. Finished Goods was debited 100,000 during June. Lorrimer Company applies overhead at a predetermined rate of 80% of direct labor cost. Job number 83, the only job still in process at the end of June, has been charged with manufacturing overhead of 3,400. What was the amount of direct materials charged to Job number 83? a. 3,400 b. 4,250 c. 8,350 d. 7,580
Barnes Company uses a job order cost system. The following data summarize the operations related to production for October: a. Materials purchased on account, 315,500. b. Materials requisitioned, 290,100, of which 8,150 was for general factory use. c. Factory labor used, 489,500 of which 34,200 was indirect. d. Other costs incurred on account for factory overhead, 600,000; selling expenses, 150,000; and administrative expenses, 100,000. e. Prepaid expenses expired for factory overhead were 18,000; for selling expenses, 6,000; and for administrative expenses, 5,000. f. Depreciation of office building was 30,000; of office equipment, 7,500; and of factory equipment, 60,000. g. Factory overhead costs applied to jobs, 711,600. h. Jobs completed, 1,425,000. i. Cost of goods sold, 1,380,000. Instructions Journalize the entries to record the summarized operations.
Direct labor costs During May, Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305. The total direct labor was incurred at a rate of 28 per direct labor hour for Job 200 and 24 per direct labor hour for Job 305. Journalize the entry to record the flow of labor costs into production during May.
Applying factory overhead Bergan Company estimates that total factory overhead costs will be 620,000 for the year. Direct labor hours are estimated to be 80,000. For Bergan Company, (A) determine the predetermined factory overhead rate using direct labor hours as the activity base, (B) determine the amount of factory overhead applied to Jobs 200 and 305 in May using the data on direct labor hours from BE 16-2, and (C) prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate.
Lucy Sportswear manufactures a specialty line of T-shirts using a job order cost system. During March, the following costs were incurred in completing Job ICU2: direct materials, 13,700; direct labor, 4,800; administrative, 1,400; and selling, 5,600. Factory overhead was applied at the rate of 25 per machine hour, and Job ICU2 required 800 machine hours. If Job ICU2 resulted in 7,000 good shirts, the cost of goods sold per unit would be: a. 5.70. b. 6.50. c. 5.50. d. 6.30.

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