Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 3.49AP
Determine and record job costs (Learning Objectives 2, 3, 4, & 6)
Veon Homes manufactures prefabricated chalets in Colorado. The company uses a perpetual inventory system and a
- a. Purchased materials on account, $490,000.
- b. Incurred total manufacturing wages of $115,000, which included both direct labor and indirect labor. Used direct labor in manufacturing as follows:
| Direct Labor | |
| Chalet 13 | $14,200 |
| Chalet 14 | $28,500 |
| Chalet 15 | $19,900 |
| Chalet 16 | $21,900 |
- c. Requisitioned direct materials in manufacturing as follows:
| Direct Materials | |
| Chalet 13 | $41,400 |
| Chalet 14 | $56,700 |
| Chalet 15 | $62,400 |
| Chalet 16 | $66,500 |
- d. Depreciation of manufacturing equipment used on different chalets, $6,300.
- e. Other overhead costs incurred on Chalets 13–16:
| Equipment rentals paid in cash | $10,600 |
| Prepaid plant insurance expired | $ 8,000 |
- f. Allocated overhead to jobs at the predetermined rate of 60% of direct labor cost.
- g. Chalets completed: 13, 15, and 16.
- h. Chalets sold on account: 13 for $92,000 and 16 for $141,000.
Requirements
- 1. Record the preceding events in the general journal.
- 2. Open T-accounts for Work in Process Inventory and Finished Goods Inventory.
Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. - 3. Summarize the job cost of the unfinished chalet and show that this equals the ending balance in Work in Process Inventory.
- 4. Summarize the job cost of the completed chalet that has not yet been sold and show that this equals the ending balance in Finished Goods Inventory.
- 5. Compute the gross profit on each chalet that was sold. What costs must the gross profit cover for Veon Homes?
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Preparing and using a job cost record to prepare journal entries
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On April 2, Ki began production of 6,000 DVDs, Job 423, for Paradigm Pictures for $1.20 sales price per DVD. Ki promised to deliver the DVDs to Paradigm Pictures by April 5. Ki incurred the following direct costs:
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Requirements
Prepare a job cost record for job 423. Calculate the predetermined overhead allocation rate (round to two decimal places); then allocate manufacturing overhead to the job.
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Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows:Job 201 $6,240Job 202 7,000Job 203 5,210Job 204 6,750Factory supervision 4,000Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $18 per direct labor hour. The direct labor rate is $40 per hour.a. Journalize the entry to record the factory labor costs.b. Journalize the entry to apply factory overhead to production for November.
Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows:
Information
State University
On-the-Go Home
Precious Pre-school
Direct Materials Cost (food)
$55,900
$37,200
$79,700
Direct Labor Cost
$43,500
$38,800
$53,100
Labor Hours
3,360
3,550
3,810
The company applies overhead at a rate of $16.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $406,800. The actual overhead for the month was $148,400, of which $118,600 should be credited to accounts payable and $41,500 should be credited to Accumulated Depreciation.Determine the costs that should be assigned to each of the jobs.
State University
On-the-Go Home
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TOTAL
Direct Materials
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Applied Overhead
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Chapter 3 Solutions
Managerial Accounting (5th Edition)
Ch. 3 - (Learning Objective 1) For which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 3) The amount of manufacturing...Ch. 3 - (Learning Objective 4) Which of the following is...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - (Learning Objective 5) Assuming the amount of...Ch. 3 - Prob. 8QCCh. 3 - Prob. 9QCCh. 3 - Prob. 10QC
Ch. 3 - Identify product costs, period costs, and product...Ch. 3 - Decide on product costing system (Learning...Ch. 3 - Determine the flow of costs between inventory...Ch. 3 - Understanding key document terms in a job cost...Ch. 3 - Compute a professional billing rate (Learning...Ch. 3 - Prob. 3.6SECh. 3 - Continuation of S3-6: compute total allocated...Ch. 3 - Continuation of S3-7: determine over- or under...Ch. 3 - Prob. 3.9SECh. 3 - Calculate job cost and billing at appliance repair...Ch. 3 - Calculating overallocated or underallocated...Ch. 3 - Prob. 3.12SECh. 3 - Record manufacturing labor costs (Learning...Ch. 3 - Prob. 3.14SECh. 3 - Prob. 3.15SECh. 3 - Understanding key terms (Learning Objectives 1, 2,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Prob. 3.18AECh. 3 - Determine the cost of a job and use it for pricing...Ch. 3 - Compute a predetermined overhead rate and...Ch. 3 - Prob. 3.21AECh. 3 - Prob. 3.22AECh. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Job cost and bid price at a consulting firm...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Understand the flow of costs in a job cost shop...Ch. 3 - Prob. 3.33BECh. 3 - Prob. 3.34BECh. 3 - Prob. 3.35BECh. 3 - Sustainability and job costing (Learning...Ch. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Prob. 3.43BECh. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Job costing or process costing for wedding...Ch. 3 - Discussion Questions 1. Why would it be...Ch. 3 - Unwrapped or How Its Made Go to www.YouTube.com...Ch. 3 - Ethics involved with choice of cost driver...Ch. 3 - Prob. 3.61ACTCh. 3 - Issues with cost of job (Learning Objectives 2, 3,...
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