Ottoson Fencing Inc. uses job order costing. The following data summarize the operations related to production for December, the first month of operations: Job 301 302 303 304 305 306 For general factory use c. Factory overhead costs incurred on account, $5,400. 301 Job Machine Hours 302 303 304 305 306 Total 27 35 29 70 39 a. Materials purchased on account, $29,050. b. Materials requisitioned and factory labor used: Materials 25 $2,870 3,690 2,300 8,510 5,000 3,770 1,030 225 Factory Labor $2,870 3,770 1,920 7,050 5,250 3,240 4,110 d. Depreciation of machinery and equipment, $2,000 e. The factory overhead rate is $52 per machine hour. Machine hours used: f. Jobs completed: 301, 302, 303 and 305. g. Jobs were shipped and customers were billed as follows: Job 301, $8,310; Job 302, $11,120; Job 303, $14,320. Required: 1. Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on December 31. Record item g as 2 entries. 2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. 3. Prepare a schedule of unfinished jobs to support the balance in the work in process account 4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.
Ottoson Fencing Inc. uses job order costing. The following data summarize the operations related to production for December, the first month of operations: Job 301 302 303 304 305 306 For general factory use c. Factory overhead costs incurred on account, $5,400. 301 Job Machine Hours 302 303 304 305 306 Total 27 35 29 70 39 a. Materials purchased on account, $29,050. b. Materials requisitioned and factory labor used: Materials 25 $2,870 3,690 2,300 8,510 5,000 3,770 1,030 225 Factory Labor $2,870 3,770 1,920 7,050 5,250 3,240 4,110 d. Depreciation of machinery and equipment, $2,000 e. The factory overhead rate is $52 per machine hour. Machine hours used: f. Jobs completed: 301, 302, 303 and 305. g. Jobs were shipped and customers were billed as follows: Job 301, $8,310; Job 302, $11,120; Job 303, $14,320. Required: 1. Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on December 31. Record item g as 2 entries. 2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. 3. Prepare a schedule of unfinished jobs to support the balance in the work in process account 4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.
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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Question
Transcribed Image Text:Ottoson Fencing Inc. uses job order costing. The following data summarize the operations related
to production for December, the first month of operations:
Job
301
302
303
304
305
306
For general
factory use
301
c. Factory overhead costs
incurred on account, $5,400.
Job Machine Hours
302
303
304
305
306
Total
27
35
29
70
39
a. Materials purchased on account, $29,050.
b. Materials requisitioned and factory labor used:
Materials
25
$2,870
3,690
225
2,300
8,510
5,000
3,770
1,030
Factory Labor
$2,870
3,770
1,920
7,050
5,250
3,240
4,110
d. Depreciation of machinery and
equipment, $2,000
e. The factory overhead rate is $52 per
machine hour. Machine hours used:
f. Jobs completed: 301, 302, 303 and 305.
g. Jobs were shipped and customers were
billed as follows: Job 301, $8,310; Job 302,
$11,120; Job 303, $14,320.
Required:
1. Journalize the entries to record the
summarized operations. Record each item
(items a-f) as an individual entry on December
31. Record item gas 2 entries.
2. Post the appropriate entries to T accounts for
Work in Process and Finished Goods, using
the identifying letters as transaction codes.
Insert memo account balances as of the end of
the month.
3. Prepare a schedule of unfinished jobs to
support the balance in the work in process
account.
4. Prepare a schedule of completed jobs on hand
to support the balance in the finished goods
account.
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