1. Explanation Job cost record is prepared to track all the manufacturing costs incurred in completion of the job. This helps managers in determining the cost of each product. There are three manufacturing costs of which job cost record keeps track: direct material cost, direct labor cost and manufacturing overheads . Direct material cost is traced by the raw material requisition form. Production personnel will fill out the material requisition form as and when some raw material is needed from the store room. After receiving the material requisition form the storeroom workers will send the material to the production facility and the unit cost and total cost of all the materials sent are posted in the raw material requisition record. Finally, raw material requisitioned are posted in the job cost record. Each time raw material is requisitioned it is posted to the direct material section of the job cost record. With the help of this procedure direct material are traced to the jobs. For completion of job 298 company has requisitioned 3 types of materials i.e., rubber, polyester fabric and steel cord from the store room. For each of the 3 materials different material requisition will be filled and the same will be posted to the direct material section of the job cost record. Total direct material cost incurred incompletion of job 298 is $2,560. Material Requisition Date: 9/30 Number. #437 Job: 298 Description Quantity Unit cost Amount Rubber 60 $16 $960 Table (1) Material Requisition Date: 10/2 Number. #439 Job: 298 Description Quantity Unit cost Amount Polyester Fabric 40 10 $400 Table (2) Material Requisition Date: 10/3 Number. #501 Job: 298 Description Quantity Unit cost Amount Steel Cord 100 12 $1,200 Table (3) Direct labor cost is traced to individual jobs by looking at the labor time records. Each employee in the factory fill out the labor time record which mentions the time spent by each employee on different jobs. Based on each employee’s hourly wage rate, direct labor cost incurred on the job is calculated. This information from the individual labor time records is posted to the direct labor section of the job cost record. On the job 298, 2 employees worked. Both of these employees will fill their labor time record. After that based on their individual hourly wage rate total direct labor cost will be calculated and same will be posted on the direct labor section of the job cost record. Total direct labor cost incurred in completion of job 298 is $816. Labor time record Employee: Week: 9/30-10/3 Hourly wage rate: $18 Record#: 1896 Date Job number Hours Cost 9/30 298 $12 $216 Table (4) Labor time record Employee: Week: 10/3-10/3 Hourly wage rate: $20 Record#: 1904 Date Job number Hours Cost 10/3 298 $30 $600 Table (5) Manufacturing overheads are allocated to the jobs based on the predetermined Manufacturing Overhead Rate (MOR). For determining predetermined MOR first of all company needs to determine its estimated manufacturing overhead costs for the entire year. After this company will choose an allocation base. For allocation base also, company will estimate the total amount that will be used in a particular year. After deciding on estimated total manufacturing overhead costs and estimated amount of the allocation base for a complete year, company can determine its predetermined MOR by dividing total estimated manufacturing overhead costs with the total estimated amount of allocation base. Predetermined MOR = Total estimated manufacturing costs Total estimated amount of the allocation base Company has chosen direct labor hours as an allocation base. Total estimated manufacturing costs for next year is $396,000. Total estimated amount of direct labor hours is 18,000. Calculate predetermined MOR by dividing total estimated manufacturing overhead costs with the total estimated amount of direct labor hours 2. To determine To calculate: Calculate the total profit and per unit profit for the job 298.

Managerial Accounting, Student Value Edition Plus NEW MyLab Accounting with Pearson eText -- Access Card Package (4th Edition)

4th Edition

ISBN: 9780133849332

Author: Karen W. Braun, Wendy M. Tietz

Publisher: PEARSON

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Chapter 3, Problem 3.47AP

To determine

To prepare: Prepare the job cost record

To determine

To calculate: Calculate the total profit and per unit profit for the job 298.

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Chapter 3, Problem 3.46AP

Chapter 3, Problem 3.48AP

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Chapter 3 Solutions

Managerial Accounting, Student Value Edition Plus NEW MyLab Accounting with Pearson eText -- Access Card Package (4th Edition)

Ch. 3 - Prob. 1QC Ch. 3 - 2. (Learning Objective 2) Which of the following...Ch. 3 - 3. (Learning Objective 2) Which of the following...Ch. 3 - 4. (Learning Objective 3) The amount of...Ch. 3 - 5. (Learning Objective 4) Which of the following...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - 7. (Learning Objective 5) Assuming the amount of...Ch. 3 - 8. (Learning Objective 6) Whenever direct...Ch. 3 - 9. (Learning Objective 6) When a job is completed,...Ch. 3 - 10. (Learning Objective 7, Appendix) Which of the...

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