Problem 7-71 (Algo) Incomplete Data: Job Costing (LO 7-2, 3, 4) Plainview Paving Contractors (PPC) is a rapidly growing, recently established company that has not been profitable despite increases in sales. It has hired you as a consultant to find ways to improve profitability. You belleve that the problem results from poor cost control and inaccurate cost estimation on jobs. The company has essentially no accounting system from which to collect data. You are able, however, to piece together the following information for April: Production 1. Completed Job 33. 2. Started and completed Job 41 3. Started Job 42. Inventory Values Work-in-process inventory (excluding applied overhead): March 31: Job 33 Direct materials $8,100 Labor (1,000 hours $36) 36,000 April 30: Job 42 Direct materials Labor (1,078 hours $36) $ 7,300 38,520 - Job 33 was exactly 60 percent complete as to labor on March 31. Job 42 was exactly 40 percent complete as to labor on April 30. All direct materials necessary to do the entire job were charged to each job as soon as it was started. There were no direct materials inventories or finished goods Inventories at either March 31 or April 30, Actual overhead was $125,800. Cost of goods sold (before adjustment for over- or underapplied overhead): Job 33 Materials Labor Overhead 5 8,100 7 Total Job 41 $122,100 Materials Labor Overhead Total Overhead was applied to jobs using a predetermined rate per labor dollar that has been used since the company began operations. All direct materials were purchased for cash and charged directly to Work-in-Process Inventory when purchased. Direct materials purchased in April amounted to $18,360. Direct labor costs charged to jobs in April were $130,200. All labor costs were the same per hour for all laborers for April. Required: Calculate the following: a. The cost elements (materials, labor, and overhead) of cost of goods sold before adjustment for over- or underapplied overhead for each job sold. b. The value of each cost element (materials, labor, and overhead) for each job in work-in-process inventory at April 30. c. Over- or underapplied overhead for April

Problem 7-71 (Algo) Incomplete Data: Job Costing (LO 7-2, 3, 4) Plainview Paving Contractors (PPC) is a rapidly growing, recently established company that has not been profitable despite increases in sales. It has hired you as a consultant to find ways to improve profitability. You belleve that the problem results from poor cost control and inaccurate cost estimation on jobs. The company has essentially no accounting system from which to collect data. You are able, however, to piece together the following information for April: Production 1. Completed Job 33. 2. Started and completed Job 41 3. Started Job 42. Inventory Values Work-in-process inventory (excluding applied overhead): March 31: Job 33 Direct materials $8,100 Labor (1,000 hours $36) 36,000 April 30: Job 42 Direct materials Labor (1,078 hours $36) $ 7,300 38,520 - Job 33 was exactly 60 percent complete as to labor on March 31. Job 42 was exactly 40 percent complete as to labor on April 30. All direct materials necessary to do the entire job were charged to each job as soon as it was started. There were no direct materials inventories or finished goods Inventories at either March 31 or April 30, Actual overhead was $125,800. Cost of goods sold (before adjustment for over- or underapplied overhead): Job 33 Materials Labor Overhead 5 8,100 7 Total Job 41 $122,100 Materials Labor Overhead Total Overhead was applied to jobs using a predetermined rate per labor dollar that has been used since the company began operations. All direct materials were purchased for cash and charged directly to Work-in-Process Inventory when purchased. Direct materials purchased in April amounted to $18,360. Direct labor costs charged to jobs in April were $130,200. All labor costs were the same per hour for all laborers for April. Required: Calculate the following: a. The cost elements (materials, labor, and overhead) of cost of goods sold before adjustment for over- or underapplied overhead for each job sold. b. The value of each cost element (materials, labor, and overhead) for each job in work-in-process inventory at April 30. c. Over- or underapplied overhead for April

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 11E

See similar textbooks