Problem 7-57 (Algo) Job Costs in a Service Company (LO 7-4) On September 1, two jobs were in process at Pete's Patios. Details of the jobs follow: Direct Materials $1,024 695 Job Number PP-24 PP-30 Direct Labor $426 1,720 Materials Inventory on September 1 totaled $5,460, and $676 worth of materials was purchased during the month. Indirect materials of $105 were withdrawn from materials inventory. On September 1, finished goods inventory consisted of two jobs, PP-12, costing $2,440, and PP-14, with a cost of $958. Costs for both jobs were transferred to Cost of Services Billed during the month. Also during September, Jobs PP-24 and PP-30 were completed. Completing Job PP-24 required an additional $1,440 in direct labor. The completion costs for Job PP-30 included $686 in direct materials and $4,200 in direct labor. Pete's Patios used a total of $1,944 of direct materials (excluding the $105 indirect materials) during the period, and total direct labor costs during the month amounted to $8,190. Overhead has been estimated at 50 percent of direct labor costs, and this relation has been the same for the past few years. Required: Compute the costs to Jobs PP-24 and PP-30 and the balances in the September 30 inventory accounts. Cost to complete PP-24 Cost to complete PP-30 Balance of Materials Inventory as of September 30 Balance of Work-in-Process as of September 30 Balance of Finished Goods Inventory as of September 30
Problem 7-57 (Algo) Job Costs in a Service Company (LO 7-4) On September 1, two jobs were in process at Pete's Patios. Details of the jobs follow: Direct Materials $1,024 695 Job Number PP-24 PP-30 Direct Labor $426 1,720 Materials Inventory on September 1 totaled $5,460, and $676 worth of materials was purchased during the month. Indirect materials of $105 were withdrawn from materials inventory. On September 1, finished goods inventory consisted of two jobs, PP-12, costing $2,440, and PP-14, with a cost of $958. Costs for both jobs were transferred to Cost of Services Billed during the month. Also during September, Jobs PP-24 and PP-30 were completed. Completing Job PP-24 required an additional $1,440 in direct labor. The completion costs for Job PP-30 included $686 in direct materials and $4,200 in direct labor. Pete's Patios used a total of $1,944 of direct materials (excluding the $105 indirect materials) during the period, and total direct labor costs during the month amounted to $8,190. Overhead has been estimated at 50 percent of direct labor costs, and this relation has been the same for the past few years. Required: Compute the costs to Jobs PP-24 and PP-30 and the balances in the September 30 inventory accounts. Cost to complete PP-24 Cost to complete PP-30 Balance of Materials Inventory as of September 30 Balance of Work-in-Process as of September 30 Balance of Finished Goods Inventory as of September 30
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:Problem 7-57 (Algo) Job Costs in a Service Company (LO 7-4)
On September 1, two jobs were in process at Pete's Patios. Details of the jobs follow:
Direct
Materials
$1,024
695
Job Number
PP-24
PP-30
Direct Labor
$426
1,720
Materials Inventory on September 1 totaled $5,460, and $676 worth of materials was purchased during the month. Indirect materials of
$105 were withdrawn from materials inventory. On September 1, finished goods inventory consisted of two jobs, PP-12, costing $2,440,
and PP-14, with a cost of $958. Costs for both jobs were transferred to Cost of Services Billed during the month.
Also during September, Jobs PP-24 and PP-30 were completed. Completing Job PP-24 required an additional $1,440 in direct labor.
The completion costs for Job PP-30 included $686 in direct materials and $4,200 in direct labor.
Pete's Patios used a total of $1,944 of direct materials (excluding the $105 indirect materials) during the period, and total direct labor
costs during the month amounted to $8,190. Overhead has been estimated at 50 percent of direct labor costs, and this relation has
been the same for the past few years.
Required:
Compute the costs to Jobs PP-24 and PP-30 and the balances in the September 30 inventory accounts.
Cost to complete PP-24
Cost to complete PP-30
Balance of Materials Inventory as of September 30
Balance of Work-in-Process as of September 30
Balance of Finished Goods Inventory as of September 30
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