Decker Screw Manufacturing Company produces special screws made to customer specifications. During June, the following data pertained to these costs: Summary of Direct Materials Requisitions Job Requisition Department Number Cost per Number Number Quantity 4,950 Unit 1 2906 B9766 $ 1.30 2907 B9767 190 22.00 1,160 4,830 1 2908 B9768 9.00 1 2906 B9769 1.31 2 2908 B9770 31 48.00 Summary of Direct Labor Time Tickets Cost per Department Job Ticket Number Number Number Hours Unit 1,118 152 1 2906 1056-1168 $ 6.50 2907 2121-2130 9.00 1 2908 1169-1189 167 6.50 2908 2131-1239 48 9.00 1 2906 1190-1239 826 6.50 Summary of Factory Overhead Application Rates Department Number Basis of Application Rates $3 per direct labor hour 150% of direct labor cost 1 2 Decker had no beginning Work-in-Process Inventory for June. Of the jobs begun in June, Job 2906 was completed and sold on account for $30,000, Job 2907 was completed but not sold, and Job 2908 was still in process. Required: 1. Calculate the direct materials, direct labor, factory overhead, and total costs for each job started in June. 2. Perform the same calculations as in requirement 1, but assume that the direct labor rate per hour increased by 10% in Department 1 and 25% in Department 2.
Decker Screw Manufacturing Company produces special screws made to customer specifications. During June, the following data pertained to these costs: Summary of Direct Materials Requisitions Job Requisition Department Number Cost per Number Number Quantity 4,950 Unit 1 2906 B9766 $ 1.30 2907 B9767 190 22.00 1,160 4,830 1 2908 B9768 9.00 1 2906 B9769 1.31 2 2908 B9770 31 48.00 Summary of Direct Labor Time Tickets Cost per Department Job Ticket Number Number Number Hours Unit 1,118 152 1 2906 1056-1168 $ 6.50 2907 2121-2130 9.00 1 2908 1169-1189 167 6.50 2908 2131-1239 48 9.00 1 2906 1190-1239 826 6.50 Summary of Factory Overhead Application Rates Department Number Basis of Application Rates $3 per direct labor hour 150% of direct labor cost 1 2 Decker had no beginning Work-in-Process Inventory for June. Of the jobs begun in June, Job 2906 was completed and sold on account for $30,000, Job 2907 was completed but not sold, and Job 2908 was still in process. Required: 1. Calculate the direct materials, direct labor, factory overhead, and total costs for each job started in June. 2. Perform the same calculations as in requirement 1, but assume that the direct labor rate per hour increased by 10% in Department 1 and 25% in Department 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:Decker Screw Manufacturing Company produces special screws made to customer specifications. During June, the
following data pertained to these costs:
Summary of Direct Materials
Requisitions
Department
Job Requisition
Cost per
Number
Number
Number
Quantity
4,950
Unit
1
2906
B9766
$ 1.30
2
2907
B9767
190
22.00
1
2908
B9768
1,160
9.00
1
2906
B9769
4,830
1.31
2
2908
B9770
31
48.00
Summary of Direct Labor Time Tickets
Cost per
Department
Job
Ticket
Number
Number
Number
Hours
Unit
$ 6.50
1,118
152
1
2906
1056-1168
2907
2121-2130
9.00
1
2908
1169-1189
167
6.50
2
2908
2131-1239
48
9.00
2906
1190-1239
826
6.50
Summary of Factory Overhead
Application Rates
Department
Number
Basis of Application Rates
$3 per direct labor hour
1
2
150% of direct labor cost
Decker had no beginning Work-in-Process Inventory for June. Of the jobs begun in June, Job 2906 was completed
and sold on account for $30,000, Job 2907 was completed but not sold, and Job 2908 was still in process.
Required:
1. Calculate the direct materials, direct labor, factory overhead, and total costs for each job started in June.
2. Perform the same calculations as in requirement 1, but assume that the direct labor rate per hour increased by
10% in Department 1 and 25% in Department 2.
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