Chapter 19, Problem 5APSA

To determine

Job Order Costing:

Job order costing is a system of allocating cost of production to an individual product or group of products. Under job order costing, each individual product or batches of products are treated as separate unit due to its unique features customize by the customers.

To determine:

Preparation of cost sheets for jobs 102 and 103 and materials ledger cards for material M, Material R and paint. Record journal entries as provided in the instructions.

Answer to Problem 5APSA

Solution:

JOB COST SHEET
Customer name: Worldwide Company Job no. 102
Direct Materials			Direct Labor		Overhead
Date	Requisition	Cost	Time Ticket	Cost	Rate	Cost
	35	$33,750	1 to 10	$90,000	80%	$72,000
	36	$12,960
		$46,710		$90,000		$72,000
REMARKS:	Job completed				COST SUMMARY
					Materials	$46,710
					Labor	$90,000
					Overhead	$72,000
					Total Cost	$208,710

JOB COST SHEET
Customer name: Reuben Company Job no. 103
Direct Materials			Direct Labor		Overhead
Date	Requisition	Cost	Time Ticket	Cost	Rate	Cost
	37	$17,500	11 to 30	$65,000	80%	$52,000
	38	$6,840
		$24,340		$65,000		$52,000
REMARKS:	Job in process				COST SUMMARY
					Materials	$24,340
					Labor	$65,000
					Overhead	$52,000
					Total Cost	$141,340

MATERIAL LEDGER CARD
Item: Material M
Received					Issued				Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requi- sition	Units	Unit Price	Total Price	Units	Units Price	Total Price
May 1									200	250	50,000
	426	250	250	62,500					450	250	112,500
					35	135	250	33,750	315	250	78,750
					37	70	250	17,500	245	250	61,250

MATERIAL LEDGER CARD
Item: Material R
Received					Issued				Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requi- sition	Units	Unit Price	Total Price	Units	Units Price	Total Price
May 1									95	180	17,100
	427	90	180	16,200					185	180	33,300
					36	72	180	12,960	113	180	20,340
					38	38	180	6,840	75	180	13,500

MATERIAL LEDGER CARD
Item: Paint
Received					Issued				Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requi- sition	Units	Unit Price	Total Price	Units	Units Price	Total Price
May 1									55	75	4,125
					39	15	75	1,125	40	75	3,000

Journalizing the events as provided in the instructions

	Accounts name	Debit	Credit
a	Raw Material Inventory	$78,700
	Accounts Payable		$78,700
d.	Factory Payroll	$174,250
	Cash		$174,250
	Factory Overhead	$102,000
	Cash		$102,000
e.	Finished Goods Inventory	$208,710
	Work in Process Inventory		$208,710
f.	Accounts Receivable	$400,000
	Sales		$400,000
	Cost of Goods Sold	$208,710
	Finished Goods Inventory		$208,710
h.	Work in Process Inventory	$71,050
	Factory Overhead	$1,125
	Raw Materials Inventory		$72,175
i.	Work in Process Inventory	$124,000
	Factory Overhead		$124,000

J. The balance in the factory overhead accounts as of the end of May is $1,625 (Over-applied).

Explanation of Solution

Explanation:

$\begin{array}{l}a.RawMaterialspurchasedoncredit\hfill \\ =MaterialM+MaterialR\hfill \\ =\$62,500+\$16,200\hfill \\ =\$78,700\hfill \end{array}$

Raw Materials Inventory
Balance	$71,225	h.	$72,175
a.	$78,700
Balance	$77,750

Work in Process Inventory
h.	$71,050	e.	$208,710
i.	$155,000
j.	$124,000
Job 103	$141,340

Sales
		f.	$400,000
		Balance	$400,000

Accounts Receivable
f.	$400,000
Balance	$400,000

Cost of Goods Sold
f.	$208,710
Balance	$208,710

Finished Goods Inventory
e.	$208,710	f.	$208,710

Factory Payroll
d.	$174,250	i.	$174,250

Factory Overhead
d.	$102,000	j.	$124,000
h.	$1,125
I	$19,250
		Balance (Overapplied)	$1,625