Voltus Communications, a manufacturer of communications
equipment, uses a job costing system. Manufacturing overhead is
applied based on machine hours and it uses a predetermined overhead
rate with budgeted overhead of $3,600,000 for the year and 80,000
machine hours.
Voltus uses a financial year of 1 July 2018 to 30 June 2019 and
all the activities for the year have been carried out. Summarised
details for period 1 July 2018 to 31 May 2019 and for June 2019
follow. Jobs B12- 008,K12-009 and K12-011 were completed during
June 2019 .All completed jobs except K12-009 have been sold by 30
June 2019.
| Jobs in process at 31 May 2019 |
|
|
|
| Job numbers |
Balance at 31 May 2019 |
| B12-008 |
$263,000 |
| K12-009 |
163,000 |
| K12-011 |
0 |
| L15-005 |
0 |
| L15-006 |
0 |
| Total |
426,000 |
| Work carried out during June 2019 |
|
| Job numbers |
Direct material |
Direct labour |
Machine hours |
| B12-008 |
$2,500 |
13,500 |
300 |
| K12-009 |
14,000 |
36,000 |
1,000 |
| K12-011 |
71,800 |
85,100 |
1,400 |
| L15-005 |
118,700 |
55,000 |
2,500 |
| L15-006 |
78,000 |
50,400 |
800 |
| Totals |
$285,000 |
$240,000 |
6,000 |
| Actual Manufacturing Overhead incurred |
1July 2018 -31 May 2019 |
During June 2019 |
| Indirect material |
$375,000 |
$27,000 |
| Indirect labour |
1,035,000 |
90,000 |
| Utilities |
735,000 |
66,000 |
| Depreciation |
1,155,000 |
105,000 |
| Total overhead |
$3,300,000 |
288,000 |
| Other information |
|
|
|
1 July 2018 – 31 May 2019 |
During June 2019 |
| Raw Material purchases * |
$2,895,000 |
$294,000 |
| Direct labour cost |
2,535,000 |
240,000 |
| Machine hours |
73,000 |
6,000 |
| Account balances 1 July |
|
| Raw Material Inventory |
$315,000 |
| Work in Process Inventory |
180,000 |
| Finished Goods Inventory |
375,000 |
| Account balance 30 June 2019 Raw Material Inventory |
$255,000 |
*Raw material purchases and raw material inventory consist of
both direct and indirect materials
Required:
1. Calculate cost of production of each jobs and make a General
Ledger