Waterways has two major public-park projects to provide with
comprehensive irrigation in one of its service locations this
month. Job J57 and Job K52 involve 15 acres of landscaped terrain,
which will require special-order, sprinkler heads to meet the
specifications of the project. Using a job cost system to produce
these parts, the following events occurred during December.
Raw materials were requisitioned from the company’s inventory on
December 2 for $5,100; on December 8 for $1,053; and on December 14
for $3,450. In each instance, two-thirds (2/3) of these materials
were for J57 and the rest for K52.
Six time tickets were turned in for these two projects for a total
amount of 18 hours of work. All the workers were paid $17 per hour.
The time tickets were dated December 3, December 9, and December
15. On each of those days, 6 labor hours were spent on these jobs,
two-thirds (2/3) for J57 and the rest for K52.
The predetermined overhead rate is based on machine hours. The
expected machine hour use for the year is 2,131 hours, and the
anticipated overhead costs are $852,400 for the year. The machines
were used by workers on projects K52 and J57 on December 3, 9, and
15. Six machine hours were used for project K52 (2 each day), and
8.5 machine hours were used for project J57 (2.5 the first day and
3 each of the other days). Both of these special orders were
completed on December 15, producing 200 sprinkler heads for J57 and
100 sprinkler heads for K52.
Additional job order activities during this period
included:
Dec. | 1 | Purchased raw materials from Coronado Supply Company on account for $52,800. | |
Dec. | 2 | Issued $39,800 of direct materials from the company’s inventory to jobs other than K52 and J57 and $3,000 of indirect materials. | |
Dec. | 12 | Paid Waterways’ factory salaries and wages for $65,500. | |
Dec. | 13 | Paid the factory’s water bill of $9,100. | |
Dec. | 18 | Transferred $50,100 of costs from other completed jobs to finished goods. | |
Dec. | 21 | Paid the factory’s electric bill of $12,100 for Waterways’ factory. | |
Dec. | 31 | Made adjusting entries forth factory that included accrued property taxes of $12,100, prepaid insurance of $8,700, and accumulated depreciation of $15,900. |
Set up the job cost sheets for Job No. J57 and Job No. K52.
Determine the total cost for each manufacturing special order for
these jobs. (Round unit costs to 2 decimal places, e.g.
12.25.)
Job No. J57 | Job No. K52 | |||
Total Cost |
$ |
$ |
||
Unit Cost |
$ |
$ |
DEBIT - CREDIT
12.15 Finished Goods Inventory. ___________- ___________
Work in Process Inventory ___________- ___________
Predetermined overhead rate = $ 852,400 / 2,131 machine hours = $ 400 per machine hour.
Job Cost Sheet: Job No. J 57:
Direct Materials | Direct Labor | Overhead | Total | |
Dec 2 | $ 3,400 | $ 3,400 | ||
Dec 3 | 68 | 1,000 | 1,068 | |
Dec 8 | 702 | 702 | ||
Dec 9 | 68 | 1,200 | 1,268 | |
Dec 14 | 2,300 | 2,300 | ||
Dec 15 | 68 | 1,200 | 1,268 | |
Total Cost | $ 6,402 | $ 204 | $ 3,400 | $ 10,006 |
Units Produced | 200 | |||
Unit Cost | $ 50.03 |
Job Cost Sheet : Job No. K 52:
Direct Materials | Direct Labor | Overhead | Total | |
Dec 2 | $ 1,700 | $ 1,700 | ||
Dec 3 | $ 34 | $ 800 | 834 | |
Dec 8 | 351 | 351 | ||
Dec 9 | 34 | 800 | 834 | |
Dec 14 | 1,150 | 1,150 | ||
Dec 15 | 34 | 800 | 834 | |
Total Cost | $ 3,201 | $ 102 | $ 2,400 | $ 5,703 |
Units Produced | 100 | |||
Unit Cost | $ 57.03 |
Date | Account Titles | Debit | Credit |
$ | $ | ||
Dec 15 | Finished Goods Inventory | 15,709 | |
Work in Process Inventory | 15,709 |
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