Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $23,200, direct labor $13,920, and manufacturing overhead $18,560. As of January 1, Job 49 had been completed at a cost of $104,400 and was part of finished goods inventory. There was a $17,400 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $141,520 and $183,280, respectively. The following additional events occurred during the month. Purchased additional raw materials of $104,400 on account. Incurred factory labor costs of $81,200. Of this amount $18,560 related to employer payroll taxes. Incurred manufacturing overhead costs as follows: indirect materials $19,720; indirect labor $23,200; depreciation expense on equipment $13,920; and various other manufacturing overhead costs on account $18,560. 4. Assigned direct materials and direct labor to jobs as follows. 1. 2. 3. Job No. 50 51 52 Direct Materials $11,600 45,240 34,800 Direct Labor $5,800 29,000 23,200
Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $23,200, direct labor $13,920, and manufacturing overhead $18,560. As of January 1, Job 49 had been completed at a cost of $104,400 and was part of finished goods inventory. There was a $17,400 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $141,520 and $183,280, respectively. The following additional events occurred during the month. Purchased additional raw materials of $104,400 on account. Incurred factory labor costs of $81,200. Of this amount $18,560 related to employer payroll taxes. Incurred manufacturing overhead costs as follows: indirect materials $19,720; indirect labor $23,200; depreciation expense on equipment $13,920; and various other manufacturing overhead costs on account $18,560. 4. Assigned direct materials and direct labor to jobs as follows. 1. 2. 3. Job No. 50 51 52 Direct Materials $11,600 45,240 34,800 Direct Labor $5,800 29,000 23,200
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:Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred
prior to January 1 on this job were as follows: direct materials $23,200, direct labor $13,920, and manufacturing overhead $18,560. As of January 1, Job 49 had been completed at a cost of
$104,400 and was part of finished goods inventory. There was a $17,400 balance in the Raw Materials Inventory account.
During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $141,520 and
$183,280, respectively. The following additional events occurred during the month.
1.
2.
3.
4.
Job No.
50
Purchased additional raw materials of $104,400 on account.
Incurred factory labor costs of $81,200. Of this amount $18,560 related to employer payroll taxes.
Incurred manufacturing overhead costs as follows: indirect materials $19,720; indirect labor $23,200; depreciation expense on equipment $13,920; and various other manufacturing
overhead costs on account $18,560.
Assigned direct materials and direct labor to jobs as follows.
51
52
Direct Materials
$11,600
45,240
34,800
Direct Labor
$5,800
29,000
23,200
Transcribed Image Text:Prepare the journal entries to record (1) the purchase of raw materials, (2) the factory labor costs incurred, and (3) the manufacturing overhead costs incurred during the month of January.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Account Titles and Explanation
(1)
(2)
(3)
Debit
I
Credit
Ih
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