Michael Jones and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs inprocess at the beginning of November. Listed below are data concerning the three audit jobs conducted during November.Direct materialsAuditor labor costsAuditor hoursIvanhoe Inc.$700$5,70076Oriole Inc.$440$7,50089Pharoah Inc.$250$4,47549Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $51 per auditor hour. TheIvanhoe Inc. job is the only incomplete job at the end of November. Actual overhead for the month was $12.900 are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $51 per auditor hour. TheIvanhoe Inc. job is the only incomplete job at the end of November. Actual overhead for the month was $12.900.(a) Determine the cost of each job.IvanhoeOriole$$Pharoah $Cost(b) Indicate the balance of the Service Contracts in Process account at the end of November.Balance in service contracts in process account $(c) Calculate the ending balance of the Operating Overhead account for November.Balance in operating overhead account $

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Description: Michael Jones and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs inprocess at the beginning of November. Listed below are data concerning the three audit jobs conducted during November

The overhead is applied to the production on the basis of the predetermined overhead rate. The…

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Michael Jones and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November. Direct materials Auditor labor costs Auditor hours Ivanhoe Inc. $700 $5,700 76 Oriole Inc. $440 $7,500 89 Pharoah Inc. $250 $4,475 49 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $51 per auditor hour. The Ivanhoe Inc job is the pobrinco

Michael Jones and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November. Direct materials Auditor labor costs Auditor hours Ivanhoe Inc. $700 $5,700 76 Oriole Inc. $440 $7,500 89 Pharoah Inc. $250 $4,475 49 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $51 per auditor hour. The Ivanhoe Inc job is the pobrinco

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows: Raw materials $ 84,500 Work in process $ 35,000 Finished goods $ 44,100 The company applies overhead cost to jobs using direct labor-hours. For this year, the company’s predetermined overhead rate of $12.50 per direct labor-hour was based on a cost formula that estimated $500,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded this year: Raw materials were purchased on account, $614,000. Raw materials used in production, $567,600. All of of the raw materials were used as direct materials. The following costs were accrued for employee services: direct labor, $450,000; indirect labor, $150,000; selling and administrative salaries, $290,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods…
Pearson Architectural Design uses a job-order costing system and applies studio overhead to jobs on the basis of direct staff costs. Because Pearson Architectural Design is a service firm, the names of the accounts it uses are different from the names used in manufacturing companies. The following costs were recorded in January: 231,100 76,600 128,688 $389,300 Cost of subcontracted work (comparable to direct materials) Direct staff costs (comparable to direct labor) Studio overhead (comparable to manufacturing overhead cost applied) Cost of work completed (comparable to cost of goods manufactured) There were no beginning inventories in January. At the end of January, only one job was still in process. This job (the Krimmer Corporation Headquarters project) had been charged with $6,610 in direct staff costs. Required: 1. Compute the predetermined overhead rate that was used during January. Predetermined overhead rate % 2. Complete the following job cost sheet for the partially completed…
Binus and Associates is an auditing firm that uses job order costing to capture the costsof its audit jobs. There were no audit jobs in process at the beginning of November. Listedbelow are data concerning the three audit jobs conducted during November. Lynn Brian Mike Direct materials $600 $400 $200 Auditor labor costs $5,400 $6,600 $3,375 Auditor hours 72 88 45 Overhead costs are applied to jobs on the basis of auditor hours, and the predeterminedoverhead rate is $50 per auditor hour. The Lynn job is the only incomplete job at the endof November. Actual overhead for the month was $11,000.Instructions:(a) Determine the cost of each job. (b) Indicate the balance of the Service Contracts in Process account at the end ofNovember. (c) Calculate the ending balance of the Operating Overhead account for November. (d) There are two basic types of cost accounting systems: (1) a process cost system and(2) a job order cost system. Explain each of the costing system and…
Eastern Furniture Inc. manufactures several different designs of outdoor furniture. Production costs are accounted for using a job order cost system. During the current period, 100 metal tables were manufactured on Job 275. Costs charged to the job before inspection are: Materials $3,300 Labor (150 hours x $10 per hour) 1,500 Factory overhead ($12 per labor hour) 1,800 Total cost charged to Job 275 $6,600 Inspection revealed that an umbrella ring had not been attached to the tables. To correct the oversight, a small part was welded to the table leg brace and the brace was repainted. The small part cost $.50 for each table, and the primer and paint cost $ 1.00 for each table. Each table required l/4 hour of labor. Required: Prepare general journal entries to record the rework and the transfer of the completed tables to Finished Goods Inventory.
Sandra Corporation uses a job-order costing system to assign manufacturing costs to jobs. At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold. Its balance sheet on January 1 appears below: Sandra Corporation Balance Sheet January 1 Assets: Cash $ 17,950 Raw materials $ 7,950 Work in process 11,950 Finished goods 16,950 36,850 Property, plant, and equipment (net) 218,950 Total assets $273,750 Liabilities and Stockholders' Equity: Retained earnings $273,750 Total liabilities and stockholders' equity $273,750 Summaries of the transactions completed during January appear below: (1) Raw materials purchased for cash $ 81,950 (2) Raw materials used in production (direct materials) $ 64,950 (3) Raw materials used in production (indirect materials) $ 10,475 (4) Direct labor paid in cash $ 77,950 (5) Indirect labor paid in cash $ 21,950 (6) Selling and administrative salaries paid in cash $ 39,950 (7) Factory utility costs paid in…
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows: Raw materials $ 59,500 Work in process $ 37,600 Finished goods $ 61,800 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $14.25 per direct labor-hour was based on a cost formula that estimated $570,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year: Raw materials were purchased on account, $634,000. Raw materials use in production, $598,400. All of of the raw materials were used as direct materials. The following costs were accrued for employee services: direct labor, $520,000; indirect labor, $150,000; selling and administrative salaries, $337,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel…
8. John Morris Associates, a C.PA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data conceming the three audit jobs conducted during November. Aaron Sharon Daron Direct materials Auditor labor costs Auditor hours $550 $5,500 74 $220 $3.400 42 $440 $6,800 06 Overhead costs are applied to jobs on the basis of auditor hours, and the predelermined overhead rate is $53 per auditor hour. The Aaron job is the only incomplete job at the end of November. Actual overhead for the month was $11,000. Instructions (a) Determine the cost of each job. (b) Indicate the balance of the Work in Process account at the end of November (c) Calculate the ending balance of the Manufacturing Overhead account November.
8. John Morris Associates, a C.P.A. firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November.
Echenko Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company's Finished Goods inventory account was debited for $380,000 and credited for $335,500. The ending balance in the Finished Goods inventory account was $62,300. At the end of the year, manufacturing overhead was overapplied by $2,900. The balance in the Finished Goods inventory account at the beginning of the year was?
Swiss Corporation is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning BalanceEnding Balance Raw materials$ 44,800 $ 70,400 Work in process $ 86,400 $ 28,800 Finished Goods $ 198,400 $ 214,400 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 105,600 machine-hours and incur $739,200 in fixed manufacturing overhead cost and $7.20 variable manufacturing overhead per direct machine hour. The following transactions were recorded for the year: 1. Raw materials were purchased on account, $1,008,000. 2. Raw materials were requisitioned for use in production, $982,400 ($899,200 direct and $83,200 indirect). 3. The following employee costs were incurred: direct labor, $1,206,400; indirect labor, $307,200; and administrative salaries, $422,400.…
Oak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses job order costing to track the cost of each customer order. On March 1, OCFF had two jobs in process with the following costs: Work in Process Job 33 Job 34 Source documents revealed the following during March: Materials Requisitions Forms $3,000 2,500 5,000 1,000 $ 11,500 Job 33 Job 34 Job 35 Indirect Balance on 3/1 $ 5,400 3,900 $ 9,300 Labor Time Tickets $ 5,500 3,100 2,600 2,000 $ 13,200 The company applies overhead to products at a rate of 65 percent of direct labor cost. Status of Job at Month-End Completed and sold Completed, but not sold In process Required: 1. Compute the cost of Jobs 33, 34, and 35 at the end of the month. 2. Calculate the balance in the Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts at month-end. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Job 33 Job 34 Job 35 Compute the cost of Jobs 33, 34, and 35 at…
XYZ company uses a job-order costing system. In reviewing its records at the end of the year, the company has discovered that OMR 12,000 of raw materials has been drawn from the storeroom and used in the production of Job PS5, but that no entry has been made in the accounting records for the use of these materials. Job has been completed and sold at year end. This error will cause: a. Work in Process to be understated by OMR 12,000 at year end. bNone of the given answer is correct . Finished Goods to be understated by OMR 12,000 at the end of the year. d. Cost of Goods Manufactured to be overstated by OMR 12,000 for the year. e. Cost of Goods Sold to be understated by 12,000 for the year.