Question

Lott Company uses a job order cost system and applies overhead to production on the basis...

Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job 49 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account.

During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month.
1. Purchased additional raw materials of $90,000 on account.
2. Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes.
3. Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $20,000; depreciation expense on equipment $12,000; and various other manufacturing overhead costs on account $16,000.
4. Assigned direct materials and direct labor to jobs as follows.

Job No.

Direct Materials

Direct Labor

50 $10,000 $5,000
51 39,000 25,000
52 30,000 20,000

(b) & (d2)

Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50. Post all costs to the job cost sheets as necessary.

Job No. 50

Date

Direct Materials

Direct Labor

Manufacturing Overhead

Beg. $ $ $
Jan.
$ $ $
Cost of completed job
   Direct materials $
   Direct labor
   Manufacturing overhead
Total cost $

Job No. 51

Date

Direct Materials

Direct Labor

Manufacturing Overhead

Jan. $ $ $
$ $ $
Cost of completed job
   Direct materials $
   Direct labor
   Manufacturing overhead
Total cost $

Job No. 52

Date

Direct Materials

Direct Labor

Manufacturing Overhead

Jan. $ $ $

Homework Answers

Answer #1

Solution:

Job No. 50
Date Direct Materials Direct Labor Manufacturing Overhead
Beg. $20,000 $12,000 $16,000
Jan. $10,000 $5,000 $6,667
$30,000 $17,000 $22,667
Cost Of Completed job
Direct Material $30,000
Direct Labor $17,000
Manufacturing Overhead $22,667
Total Cost $69,667
Job No. 51
Date Direct Materials Direct Labor Manufacturing Overhead
Jan. $39,000 $25,000 $33,333
$39,000 $25,000 $33,333
Cost Of Completed job
Direct Material $39,000
Direct Labor $25,000
Manufacturing Overhead $33,333
Total Cost $97,333
Job No. 52
Date Direct Materials Direct Labor Manufacturing Overhead
Jan. $30,000 $20,000 $26,667
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