Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 19 - Job Order Costing
Exercise 19-19 (15 minutes)
(1) Raw Materials Inventory................................................3,108
Accounts Payable..................................................... 3,108
To record raw material purchases.
(2) The amount of materials purchased is almost equal to the amount of
PROBLEM SET A
Problem 19-1A (80 minutes)
Part 1 Total manufacturing costs and the costs assigned to each job
306 307 308 April Total
From March
Direct materials......................$ 29,000 $ 35,000
Direct labor............................. 20,000 18,000
Applied overhead*.................. 10,000 9,000
19-1063
Chapter 19 - Job Order Costing
Part 2 Journal entries for April
a. Raw Materials Inventory................................................500,000
Accounts Payable..................................................... 500,000
To record materials purchases.
e. Work in Process Inventory............................................170,000
Factory Overhead..................................................... 170,000
To apply overhead to jobs.
19-1064
Chapter 19 - Job Order Costing
Problem 19-1A (continued)
f. [continued from prior page]
Factory Overhead...........................................................
50,000
Raw Materials Inventory.......................................... 50,000
To record indirect materials.
To record factory rent.
g. Finished Goods Inventory (306 & 307)..........................828,500
Work in Process Inventory...................................... 828,500
To record jobs completed ($321,500 + $507,000).
j. Cost of Goods Sold........................................................5,000
Factory Overhead*................................................... 5,000
To assign underapplied overhead.
*Overhead applied to jobs...... $170,000
Factory equip. depreciation....... 51,000 175,000
Underapplied overhead.............. $ 5,000
19-1065
Chapter 19 - Job Order Costing
Problem 19-1A (Continued)
Part 3
MARCELINO COMPANY
Schedule of Cost of Goods Manufactured
For Month Ended April 30
Direct materials used.................................................................. $ 455,000
Direct labor used......................................................................... 340,000
Part 4
Gross profit on the income statement for the month ended April 30
Sales.......................................................................................................... $ 635,000
Presentation of inventories on the April 30 balance sheet
Inventories
Raw materials .......................................................................................... $ 75,000*
* Beginning raw materials inventory...................................................................$ 80,000
Purchases...........................................................................................................500,000
Part 5
Overhead is underapplied by $5,000, meaning that individual jobs or batches of
jobs are under-costed. Thus, profits at the job (and batch) level are overstated.
Problem 19-2A (75 minutes)
Part 1
a.
19-1066
Chapter 19 - Job Order Costing
b.
Dec. 31 Work in Process Inventory............................................59,800
Wages Payable......................................................... 59,800
To record direct labor costs for
Jobs 402 and 404 ($36,000 + $23,800).
c.
Dec. 31 Work in Process Inventory............................................119,600
d.
Dec. 31 Factory Overhead...........................................................5,600
Raw Materials Inventory.......................................... 5,600
To add cost of indirect materials
to actual factory overhead.
e.
Part 2
Revised Factory Overhead account
Ending balance from trial balance.............................................$115,000 debit
Applied to Jobs 402 and 404......................................................(119,600) credit
19-1067
Chapter 19 - Job Order Costing
Problem 19-2A (continued)
Part 3
BERGAMO BAY COMPANY
Trial Balance
December 31, 2015
Debit Credit
Cash ...................................................................................$170,000
Accounts receivable.......................................................... 75,000
Raw materials inventory*.................................................. 45,600
Work in process inventory**............................................. 208,200
Finished goods inventory ................................................ 15,000
Retained earnings ............................................................. 271,000
Sales ................................................................................... 373,000
Cost of goods sold ($218,000 + $9,200)................................ 227,200
Factory overhead............................................................... 0
Operating expenses.......................................................... 60,000 _______
Ending balance.....................................................................................$45,600
** Work in process inventory
Job 402 Job 404 Total
Direct materials.................. $ 10,200 $18,600 $ 28,800
Direct labor......................... 36,000 23,800 59,800
19-1068
Chapter 19 - Job Order Costing
Problem 19-2A (continued)
Part 4
BERGAMO BAY COMPANY
Income Statement
For Year Ended December 31, 2015
Sales................................................................................................$373,000
Cost of goods sold......................................................................... (227,200)
BERGAMO BAY COMPANY
Balance Sheet
December 31, 2015
Assets
Finished goods inventory................................................... 15,000 268,800
Prepaid rent.......................................................................... 3,000
Total assets........................................................................... $516,800
Liabilities and equity
Accounts payable................................................................. $ 17,000
Wages payable......................................................................
Notes payable.......................................................................
68,000
25,000
Total liabilities and equity.................................................... $516,800
19-1069
19-1070
Chapter 19 - Job Order Costing
Problem 19-2A (concluded)
Part 5
This $5,600 error would cause the costs for Job 404 to be understated.
Since Job 404 is in process at the end of the period, work in process
19-1071
