Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Textbook Question
Chapter 7, Problem 56P
For the month of July, UP Payroll Services worked 3,000 hours for Dune Motors, 900 hours for Jake’s Charters, and 1,500 hours for Mission Hospital. UP bills clients at $128 an hour; its labor costs are $48 an hour. A total of 6,000 hours were worked in January with 600 hours not billable to clients.
Required
- a. What are the revenue and cost per client?
- b. Prepare an income statement for July.
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For the month of July, UP Payroll Services worked 3,000 hours for Dune Motors, 900 hours for Jake’s Charters, and 1,500 hours for Mission Hospital. UP bills clients at $128 an hour; its labor costs are $48 an hour. A total of 6,000 hours were worked in July with 600 hours not billable to clients. Overhead costs of $72,000 were incurred and were assigned to clients on the basis of direct labor-hours. Because 600 hours were not billable, some overhead was not assigned to jobs. UP had $48,000 in marketing and administrative costs. All transactions were on account.
Required:
a. What are the revenue and cost per client?
b. Prepare an income statement for July.
The information below relates to the factory overhead incurred by Burlywood, Inc., in the month of September:
Indirect labor cost
$15,000
Electricity charges
$ 9,450
Ordering costs
$12,000
The indirect labor hours vary according to the number of hours worked. The workers worked for 3,000 hours in the month of September. Determine the expected indirect labor cost for the month of October if the workers are expected to work for 3,500 hours in the month of October.
a.$16,500
b.$14,000
c.$17,500
d.$11,000
Ehrling Brothers Company makes jobs to customer order. During the month of July, the following occurred:
Materials were purchased on account for $45,760.
Materials totaling $40,880 were requisitioned for use in producing various jobs.
Direct labor payroll for the month was $22,400 with an average wage of $14 per hour.
Actual overhead of $8,850 was incurred and paid in cash.
Manufacturing overhead is charged to production at the rate of $5.40 per direct labor hour.
Completed jobs costing $59,000 were transferred to Finished Goods.
Jobs costing $58,000 were sold on account for $ 73,750. Make the entry to record the revenue from the sale first, followed by the entry to record the cost of the jobs.
Beginning balances as of July 1 were:
Materials Inventory
$1,300
Work-in-Process Inventory
3,400
Finished Goods Inventory
2,640
Required:
Question Content Area
1. Prepare the journal entries for the preceding events.
a.
b.
c.…
Chapter 7 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 7 - What are characteristics of companies that are...Ch. 7 - Direct labor-hours and direct labor dollars are...Ch. 7 - What is the purpose of having two manufacturing...Ch. 7 - How does the accountant know what to record for...Ch. 7 - How is job costing in service organizations (for...Ch. 7 - What are the costs of a product using normal...Ch. 7 - Prob. 7RQCh. 7 - What are three common sources of improprieties in...Ch. 7 - In the context of job costing, what are projects?...Ch. 7 - Why do most companies use normal or standard...
Ch. 7 - Why is control of materials important from a...Ch. 7 - Worrying about the choice of an overhead...Ch. 7 - Prob. 13CADQCh. 7 - Interview the manager of a campus print shop or a...Ch. 7 - Would a dentist, an architect, a landscaper, and a...Ch. 7 - Consider two firms in the same industry. Is it...Ch. 7 - Prob. 17CADQCh. 7 - Assume that you have been asked to paint the...Ch. 7 - Prob. 19CADQCh. 7 - ABC Consultants works for only two clients: a...Ch. 7 - Prob. 21CADQCh. 7 - Assigning Costs to Jobs The following transactions...Ch. 7 - Assigning Costs to Jobs Sunset Products...Ch. 7 - Assigning Costs to Jobs Forest Components makes...Ch. 7 - Assigning Costs to Jobs Partially completed...Ch. 7 - Assigning Costs to Jobs Selected information from...Ch. 7 - Assigning Costs to Jobs Partially completed...Ch. 7 - Predetermined Overhead Rates Dixboro Company...Ch. 7 - Predetermined Overhead Rates Southern Rim Parts...Ch. 7 - Refer to the information in Exercise 7-29. Prepare...Ch. 7 - How much overhead was applied to each of the four...Ch. 7 - Refer to the information in Exercise 7-31. Prepare...Ch. 7 - Predetermined Overhead Rates Aspen Company...Ch. 7 - Prob. 34ECh. 7 - Applying Overhead Using a Predetermined Rate Marys...Ch. 7 - Applying Overhead Using a Predetermined Rate Turco...Ch. 7 - Calculating Over- or Underapplied Overhead Toms...Ch. 7 - Predetermined Overhead Rates: Ethical Issues...Ch. 7 - Compute the predetermined rate assuming that...Ch. 7 - Job Costing in a Service Organization At the...Ch. 7 - Job Costing in a Service Organization For August,...Ch. 7 - Job Costing in a Service Organization Allocation...Ch. 7 - Job Costing in a Service Organization TechMaster...Ch. 7 - Prob. 44ECh. 7 - Prob. 45ECh. 7 - Prob. 46PCh. 7 - Estimate Machine-Hours Worked from Overhead Data...Ch. 7 - Estimate Hours Worked from Overhead Data Capitol,...Ch. 7 - What will Wabash report as Cost of Goods Sold for...Ch. 7 - Assigning CostsMissing Data The following...Ch. 7 - Assigning Costs: Missing Data The following...Ch. 7 - Analysis of Overhead Using a Predetermined Rate...Ch. 7 - Analysis of Overhead Using a Predetermined Rate...Ch. 7 - Finding Missing Data A new computer virus...Ch. 7 - Cost Accumulation: Service Youth Athletic Services...Ch. 7 - Job Costs: Service Company For the month of July,...Ch. 7 - Job Costs in a Service Company On September 1, two...Ch. 7 - Tracing Costs in a Job Company The following...Ch. 7 - Cost Flows through Accounts Brighton Services...Ch. 7 - Show Flow of Costs to Jobs Kims Asphalt does...Ch. 7 - Reconstruct Missing Data A tornado struck the only...Ch. 7 - Find Missing Data IYF Corporation manufactures...Ch. 7 - Find Missing Data Accounting records for NIC...Ch. 7 - Incomplete Data: Job Costing Chelsea Household...Ch. 7 - Job Costing and Ethics Old Port Shipyards does...Ch. 7 - Job Costing and Ethics Chuck Moore supervises two...Ch. 7 - Job Costing and Ethics Global Partners is a...Ch. 7 - Prob. 68ICCh. 7 - What is the predetermined overhead rate for...
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- Cycle Specialists manufactures goods on a job order basis. During the month of June, three jobs were started in process. (There was no work in process at the beginning of the month.) Jobs Sprinters and Trekkers were completed and sold, on account, during the month (selling prices: Sprinters, 22,000; Trekkers, 27,000); Job Roadsters was still in process at the end of June. The following data came from the job cost sheets for each job. The factory overhead includes a total of 1,200 of indirect materials and 900 of indirect labor. Prepare journal entries to record the following: a. Materials used. b. Factory wages and salaries earned. c. Factory Overhead transferred to Work in Process d. Jobs completed. e. Jobs sold.arrow_forwardA company has the following transactions during the week. Purchase of $1,000 raw materials inventory Assignment of $500 of raw materials inventory to Job 5 Payroll for 20 hours with $1,000 assigned to Job 5 Factory utility bills of $750 Overhead applied at the rate of $10 per hour What is the cost assigned to Job 5 at the end of the week?arrow_forwardBaldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.arrow_forward
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