In May 15, 2020, Starr Construction Company was the successful bidder on a contract with the Arizona Government to build a pedestrian overpass in Flagstaff, Arizona. The firm utilizes a job order costing system, and this job was assigned Job #515. The contract price for the overpass was $450,000. The owners of Starr Construction agreed to a completion date of December 15, 2020, for the contract. The firm’s engineering and cost accounting departments estimated the following costs for completion of the overpass: $120,000 for direct material, $135,000 for direct labor, and $81,000 for overhead. The firm began to work on the overpass in August. During August, direct material cost assigned to Job #515 was $30,900 and direct labor cost associated with Job #515 was $47,520. The firm uses a predetermined overhead rate of 60 percent of direct labor cost. Required:Prepare a job order cost sheet for Job #515, including all job details, and post the appropriate cost information for August.

Job cost sheet includes all the direct material, direct labor and manufacturing overhead traceable…

Answered: In May 15, 2020, Starr Construction…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

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In May 15, 2020, Starr Construction Company was the successful bidder on a contract with the Arizona Government to build a pedestrian overpass in Flagstaff, Arizona. The firm utilizes a job order costing system, and this job was assigned Job #515. The contract price for the overpass was $450,000. The owners of Starr Construction agreed to a completion date of December 15, 2020, for the contract. The firm’s engineering and cost accounting departments estimated the following costs for completion of the overpass: $120,000 for direct material, $135,000 for direct labor, and $81,000 for overhead.

The firm began to work on the overpass in August. During August, direct material cost assigned to Job #515 was $30,900 and direct labor cost associated with Job #515 was $47,520. The firm uses a predetermined overhead rate of 60 percent of direct labor cost.

Required:

Prepare a job order cost sheet for Job #515, including all job details, and post the appropriate cost information for August.

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