Mateus Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In September the company completed job X86V that consisted of 25,000 units of one of the company's standard products. No other jobs were in process during the month. The total manufacturing cost for job X86V according to its job cost sheet was $1,232,500. During the month, the actual manufacturing overhead cost incurred was $286,700 and the manufacturing overhead applied was $276,900. And during the month, 18,000 completed units from job X86V were sold. No other products were sold during the month. The cost of goods sold that would appear on the income statement for September, after adjustment for any underapplied or overapplied overhead, is closest to: a. $897,200. b. $1,232,470. c. $877,600. d. $1,242,270.

Mateus Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In September the company completed job X86V that consisted of 25,000 units of one of the company's standard products. No other jobs were in process during the month. The total manufacturing cost for job X86V according to its job cost sheet was $1,232,500. During the month, the actual manufacturing overhead cost incurred was $286,700 and the manufacturing overhead applied was $276,900. And during the month, 18,000 completed units from job X86V were sold. No other products were sold during the month. The cost of goods sold that would appear on the income statement for September, after adjustment for any underapplied or overapplied overhead, is closest to: a. $897,200. b. $1,232,470. c. $877,600. d. $1,242,270.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter1: Introduction To Cost Accounting

Section: Chapter Questions

Problem 12E: Gerken Fabrication Inc. uses the job order cost system of accounting. The following information was...

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Luna Manufacturing Inc. completed Job 2525 on May 31, and there were no jobs in process in the plant. Prior to June 1, the predetermined overhead application rate for June was computed from the following data, based on an estimate of 5,000 direct labor hours: The factory has one production department and uses the direct labor hour method to apply factory overhead. Three jobs are started during the month, and postings are made daily to the job cost sheets from the materials requisitions and labor-time records. The following schedule shows the jobs and amounts posted to the job cost sheets: The factory overhead control account was debited during the month for actual factory overhead expenses of 27,000. On June 11, Job 2526 was completed and delivered to the customer using a mark-on percentage of 50% on manufacturing cost. On June 24, Job 2527 was completed and transferred to Finished Goods. On June 30, Job 2528 was still in process. Required: 1. Prepare job cost sheets for Jobs 2526, 2527, and 2528, including factory overhead applied when the job was completed or at the end of the month for partially completed jobs. 2. Prepare journal entries as of June 30 for the following: a. Applying factory overhead to production. b. Closing the applied factory overhead account. c. Closing the factory overhead account. d. Transferring the cost of the completed jobs to finished goods. e. Recording the cost of the sale and the sale of Job 2526.
Channel Products Inc. uses the job order cost system of accounting. The following is a list of the jobs completed during March, showing the charges for materials issued to production and for direct labor. Assume that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 200%. Required: Compute the amount of overhead to be added to the cost of each job completed during the month. Compute the total cost of each job completed during the month. Compute the total cost of producing all the jobs finished 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
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.
Collegiate Publishing Inc. began printing operations on March 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, 4,500 of indirect materials and 8,200 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form: Journalize the summary entry to record each of the following operations for March (one entry for each operation): a. Direct and indirect materials used. b. Direct and indirect labor used. c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). d. Completion of Jobs 301 and 302.
The following information, taken from the books of Herman Brothers Manufacturing represents the operations for January: The job cost system is used, and the February cost sheet for Job M45 shows the following: The following actual information was accumulated during February: Required: 1. Using the January data, ascertain the predetermined factory overhead rates to be used during February, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Prepare a schedule showing the total production cost of Job M45 under each method of applying factory overhead. 3. Prepare the entries to record the following for February operations: a. The liability for total factory overhead. b. Distribution of factory overhead to the departments. c. Application of factory overhead to the work in process in each department, using direct labor hours. (Use the predetermined rate calculated in Requirement 1.) d. Closing of the applied factory overhead accounts. e. Recording under- and overapplied factory overhead and closing the actual factory overhead accounts.
During August, Skyler Company worked on three jobs. Data relating to these three jobs follow: Overhead is assigned on the basis of direct labor hours at a rate of 2.30 per direct labor hour. During August, Jobs 39 and 40 were completed and transferred to Finished Goods Inventory. Job 40 was sold by the end of the month. Job 41 was the only unfinished job at the end of the month. Required: 1. Calculate the per-unit cost of Jobs 39 and 40. (Round unit costs to nearest cent.) 2. Compute the ending balance in the work-in-process inventory account. 3. Prepare the journal entries reflecting the completion of Jobs 39 and 40 and the sale of Job 40. The selling price is 140 percent of cost.
Abbey Products Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, 60,000; estimated materials costs, 50,000; estimated direct labor costs, 60,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in process at the beginning of the month, none. The actual factory overhead incurred for November was 80,000, and the production statistics on November 30 are as follows: Required: 1. Compute the predetermined rate, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Using each of the methods, compute the estimated total cost of each job at the end of the month. 3. Determine the under-or overapplied factory overhead, in total, at the end of the month under each of the methods. 4. Which method would you recommend? Why?
Potomac Automotive Co. manufactures engines that are made only on customers orders and to their specifications. During January, the company worked on Jobs 007, 008, 009, and 010. The following figures summarize the cost records for the month: Jobs 007 and 008 have been completed and delivered to the customer at a total selling price of 426,000, on account. Job 009 is finished but has not yet been delivered. Job 010 is still in process. There were no materials or work in process inventories at the beginning of the month. Material purchases were 115,000, and there were no indirect materials used during the month. Required: 1. Prepare a summary showing the total cost of each job completed during the month or in process at the end of the month. 2. Prepare the summary journal entries for the month to record the distribution of materials, labor, and overhead costs. 3. Determine the cost of the inventories of completed engines and engines in process at the end of the month. 4. Prepare the journal entries to record the completion of the jobs and the sale of the jobs. 5. Prepare a statement of cost of goods manufactured.
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
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.
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.