Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $16,800, direct labor $10,080, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a $12,600 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The following additional events occurred during the month. 1. 2. 3. 4. 5. Purchased additional raw materials of $75,600 on account. Incurred factory labor costs of $58,800. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other manufacturing overhead costs on account $13,440. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials 50 51 52 $8,400 32.760 25,200 Direct Labor $4,200 21.000 16,800 Assigned indirect materials of $14,280 and indirect labor of $16,800.
Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $16,800, direct labor $10,080, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a $12,600 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The following additional events occurred during the month. 1. 2. 3. 4. 5. Purchased additional raw materials of $75,600 on account. Incurred factory labor costs of $58,800. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other manufacturing overhead costs on account $13,440. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials 50 51 52 $8,400 32.760 25,200 Direct Labor $4,200 21.000 16,800 Assigned indirect materials of $14,280 and indirect labor of $16,800.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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:Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022, Job 50 was the only job in process. The costs incurred prior to January 1 on this job
were as follows: direct materials $16,800, direct labor $10,080, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a
$12,600 balance in the Raw Materials Inventory account on January 1.
During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The
following additional events occurred during the month.
1.
2.
3.
4.
5.
Purchased additional raw materials of $75,600 on account.
Incurred factory labor costs of $58,800.
Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other manufacturing overhead costs on account $13,440.
Assigned direct materials and direct labor to jobs as follows.
Job No. Direct Materials
50
51
52
$8,400
32,760
25,200
Direct Labor
$4,200
21,000
16,800
Assigned indirect materials of $14,280 and indirect labor of $16,800.
Transcribed Image Text:Prepare the journal entries to record the assignment of (1) raw materials, (2) factory labor, and (3) manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in
(a). (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Account Titles and Explanation
(1)
(2)
(3)
Work in Process Inventory
Raw Materials Inventory
Work in Process Inventory
Factory Labor
Work in Process Inventory
Manufacturing Overhead
Debit
66360
42000
50400
Credit
66360
42000
50400
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