Chapter 19, Problem 5BPSB

To determine

Job cost sheet is defined as a document for recording manufacturing costs related to products and services. Generally it is prepared by companies who computes and allocates costs to products and services using job order costing system.

The information that is shown on job cost sheet usually includes materials requisition number, cost of direct materials issued, time tickets, direct labor hours, direct labor rate per hour, etc.

Requirement-1

To determine:

1) We have to prepare job sheets for the job 450 and 451.

Answer to Problem 5BPSB

Solution:

JOB COST SHEET
Customer's Name			ENCINITA Company					Job No.			450
	Direct Materials			Direct Labor		Overhead Costs Applied
Date	Requisition Number	Amount($)		Time Ticket Number	Amount($)	Date				Rate			Amount
	223	16,000		1-10	40,000					70%			28,000
	224	9,600
						SUMMARY
						Direct material						25,600
						Direct labor						40,000
						Overhead						28,000
						Cost of job						93,600
	Total	25,600			40,000

JOB COST SHEET

Customer's Name

Fargo, Inc.

Job No.

451

Direct Materials

Direct Labor

Overhead Costs Applied

Date

Requisition Number

Amount

Time Ticket Number

Amount

Date

Rate

Amount

225

8,000

11-20

32,000

June--

70%

22,400

226

4,800

SUMMARY OF COSTS

Direct material

12,800

Direct labor

32000

Overhead

22,400

Cost of job

67,200

Total

12,800

Total

32,000

Explanation of Solution

Explanation:

Job cost sheet for Job no 450 and Job no 451 have been prepared taking into consideration the relevant requisition no for direct material, time ticket number for direct labor and overheads @ 70%.

To determine

Requirement-2

To determine

We have to prepare journal entries for various requisition given in question and ledger account.

Answer to Problem 5BPSB

Solution:

MATERIALS LEDGER CARD

Material M

Received					Issued				Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requi-sition	Units	Unit Price	Total Price	Units	Unit Price	Total Price
June 1									120	200	24,000
	20	150	200	30,000					270	200	54,000
					#223	80	200	16,000	190	200	38,000
					#225	40	200	8,000	150	200	30,000

MATERIALS LEDGER CARD

Material R

Received					Issued				Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requi-sition	Units	Unit Price	Total Price	Units	Unit Price	Total Price
June 1									80	160	12,800
	21	70	160	11,200					150	160	24,000
					224	60	160	9,600	90	160	14,400
					226	30	160	4,800	60	160	9,600

Material Ledger Card

Paint

Received

Issued

Balance

Date

Receiving Report

Units

Unit Price

Total Price

Requi-sition

Units

Unit Price

Total Price

Units

Unit Price

Total Price

June 1

44

72

3,168

#227

12

72

864

32

72

2,304

Explanation of Solution

Explanation:

The journal entries required are as below:

GENERAL JOURNAL	Debit($)	Credit($)
Raw Materials Inventory($30,000+$11,200	41,200
Accounts Payable			41,200
(being materials purchases recorded).
Factory Payroll	84,000
Cash			84,000
being factory payroll recorded)
Factory Overhead	36,800
Cash			36,800
(being other factory overhead recorded)
Finished Goods Inventory	93,600
Goods in Process			93,600
(being jobs completed recorded)
Accounts Receivable	290,000
Sales			290,000
(being sales recorded)
Cost of Goods Sold	93,600
Finished Goods Inventory			93,600
(being cost of sales recorded)
Goods in Process Inventory($16,000 + $8,000 + $9,600 + $4,800)	38,400
Factory Overhead	864
Raw Materials Inventory			39,264
(being direct & indirect materials recorded)
Goods in Process Inventory ($40,000 + $32,000)	72,000
Factory Overhead	12,000
Factory Payroll			84,000
(being direct & indirect labor recorded)
Goods in Process Inventory ($28,000 + $22,400).	50,400
Factory Overhead			50,400
(being overhead applied)

To determine

Requirement -3

To determine:

We have to compute factory overhead at the end of the month from the requirement 1 & 2.

Answer to Problem 5BPSB

Solution:

Factory overhead over applied is $736.

Explanation of Solution

Explanation:

The ending balance in Factory Overhead is computed as:

Particulars	Amount($)
Actual Miscellaneous overhead	$36,800
Actual Indirect materials	864
Actual Indirect labor	12,000
Total actual factory overhead	49,664
Factory overhead applied	50,400
Over-applied overhead	$ (736)