Chapter 19 – Job Order Costing
Problem 19-1B (Continued)
Part 3
PEREZ MFG.
Schedule of Cost of Goods Manufactured
For Month Ended September 30
Direct materials used…………………………………………….…… $350,000
Direct labor used………………………………………………….……. 218,000
Deduct work in process, September 30 (Job 116)…......... (260,000)
Cost of goods manufactured…………………….……………….. $500,000
Part 4
Gross profit on the income statement for the month ended September 30
Sales…………………………………………………………………………………………. $380,000
Presentation of inventories on the September 30 balance sheet
Inventories
Raw materials ……………………………………………………………………..…… $170,000*
Work in process (Job 116)………………………………………………………… 260,000
Total inventories ……………………………………………………………………… $744,000
Problem 19-1B (Concluded)
Part 5
Overhead is overapplied by $3,000, meaning that individual jobs or batches
are over-costed. Thus, profits at the job (and batch) level are understated.
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Education.
Chapter 19 – Job Order Costing
Problem 19-2B (75 minutes)
Part 1
a.
Dec. 31 Work in Process Inventory…………………….……………….12,200
Raw Materials Inventory………………..…………………. 12,200
To record direct materials costs for
Jobs 603 and 604 ($4,600 + $7,600).
b.
d.
Dec. 31 Factory Overhead…………………………………………………..2,100
Raw Materials Inventory………………..…………………. 2,100
To add cost of indirect materials
to actual factory overhead.
e.
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Chapter 19 – Job Order Costing
Problem 19-2B (Continued)
Part 2
Revised Factory Overhead account
Ending balance from trial balance……………………………..…….$27,000 Debit
Applied to Jobs 603 and 604……………………………….……..……(26,000) Credit
Dec. 31 Cost of Goods Sold………………………………………..………6,100
Part 3
CAVALLO MFG.
Trial Balance
December 31, 2015
Debit Credit
Cash ………………………………………….…………………………$ 64,000
Accounts receivable…………………………….………..……… 42,000
Notes payable ……………………………………………………….
13,500
Common stock …………………………………..……..…………. 30,000
Retained earnings …………………………………….………….. 87,000
Sales ……………………………………………………………..…….. 180,000
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Chapter 19 – Job Order Costing
Problem 19-2B (Continued)
Part 3 (Concluded)
* Raw materials inventory
Balance per trial balance…………………………………………………………....$26,000
** Work in process inventory
Job 603 Job 604 Total
Direct materials……………… $ 4,600 $ 7,600 $12,200
*** $105,000 + $6,100 = $111,100
Part 4
CAVALLO MFG.
Income Statement
For Year Ended December 31, 2015
Sales………………………………………………………………………..…$ 180,000
Cost of goods sold……………………………………………..………. (111,100)
Net income…………………………………………………..……………..$ 23,900
Problem 19-2B (Concluded)
Part 4 (Concluded)
CAVALLO MFG.
Balance Sheet
December 31, 2015
Assets
Cash…………………………………………………………..… $ 64,000
Accounts receivable……………………..……………… 42,000
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Chapter 19 – Job Order Costing
Inventories
Raw materials inventory…………………..…..………$11,700
Work in process inventory……….…………………..51,200
Liabilities and equity
Accounts payable…………………………………………. $ 10,500
Wages payable………………………………………………
Notes payable……………………………………………….
16,000
13,500
Total liabilities…………………………………………..….. 40,000
Total liabilities and equity…………………………..…. $180,900
Part 5
The $2,100 error would cause the costs for Job 604 to be understated.
Since Job 604 is in process at the end of the period, work in process
inventory and total assets would both be understated on the balance sheet.
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Chapter 19 – Job Order Costing
Problem 19-3B (70 minutes)
Part 1
JOB COST SHEETS
Job No. 487
Total cost…………….…….$54,000
Job No. 488
Job No. 489
Materials………………..….$12,000
Labor……………………..… 25,000
Overhead…………..…..…. 50,000
Total cost…………….…….$87,000
Job No. 490
Materials………………..….$14,000
Job No. 491
Materials………………..….$ 4,000
Labor……………………..… 2,000
Overhead…………..…..…. 4,000
Total cost…………….…….$10,000
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Chapter 19 – Job Order Costing
Problem 19-3B (Concluded)
Part 2
a. Raw Materials Inventory…………………….…………………..125,000
Accounts Payable…………………………………………….. 125,000
To record materials purchases.
d. Work in Process Inventory……………………………………..68,000
Factory Overhead…………………………………………..………16,000
Cash……………………………………………………………..…. 84,000
To record direct & indirect labor.
($54,000 + $87,000 + $92,000).
Problem 19-3B (Continued)
[continued from prior page]
g. Accounts Receivable………………………….………………….340,000
Sales………………………………………………..…………..…. 340,000
To record sales on account.
Cost of Goods Sold……………………………………….……….141,000
Finished Goods Inventory………………………………… 141,000
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Chapter 19 – Job Order Costing
h. Factory Overhead…………………………………………..………96,000
To record other factory overhead.
i. Work in Process Inventory……………………….…………….18,000
Factory Overhead…………………………………………….. 18,000
To apply overhead to jobs
[($7,000 + $2,000) x 200%].
Problem 19-3B (Continued)
Part 3
GENERAL LEDGER ACCOUNTS
Raw Materials Inventory
(a) 125,000 (b) 92,000
Bal. 33,000
Work in Process Inventory Factory Overhead
Bal. 51,000 Bal. 1,000
Finished Goods Inventory Cost of Goods Sold
(f) 233,000 (g) 141,000 (g) 141,000
Bal. 92,000 Bal. 141,000
Part 4
Reports of Job Costs*
Finished Goods Inventory
Job 490…………………..……………… $ 92,000
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Chapter 19 – Job Order Costing
Balance………………………………….. $ 92,000
*Individual totals reconcile with account balances shown in part 3.
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