Chapter 07 – Job Costing
7-31
7-46. (55 min.) Tracing Costs In A Job Company: Dungan Cabinetry
a.
(1)
Materials Inventory ……………………………………………….
53,700
Accounts Payable ……………………………………………..
53,700
(2)
Manufacturing Overhead ……………………………………….
1,500
Materials Inventory …………………………………………….
1,500
(3)
Accounts Payable …………………………………………………
53,700
Cash ……………………………………………………………….
53,700
(4)
Work in Process—Direct Materials ………………………….
25,500
Materials Inventory …………………………………………….
25,500
(5)
Payroll ………………………………………………………………..
42,000
Payroll Taxes Payable ……………………………………….
13,500
Cash ……………………………………………………………….
28,500
(6)
Payroll ………………………………………………………………..
21,000
Fringe Benefits Payable …………………………..…………
21,000
(7)
Work in Process (60% x $63,000) …………………………..
37,800
Manufacturing Overhead (30% x $63,000) ……………….
18,900
Administrative and Marketing Costs (10% x $63,000) ..
6,300
Payroll ($21,000 + $42,000) ………………………………..
63,000
(8)
Manufacturing Overhead ……………………………………….
32,400
Cash ……………………………………………………………….
32,400
(9)
Work in Process—Overhead ($37,800 x 175%) ………..
66,150
Applied Manufacturing Overhead………………………..
66,150
(10)
Manufacturing Overhead Control…………………………….
17,250
Accumulated Depreciation—Property, Plant, and
Equipment ………………………………………………….
17,250
Chapter 07 – Job Costing
7-46. (continued)
b.
Materials Inventory
55,575
1,500
(2)
53,700
25,500
(4)
82,275
a
a$82,275 = $55,575 + $53,700 – $1,500 – $25,500.
Balance 1/1
Per Finished Goods
(7) Direct Labor
1,500
17,250
66,150
(9)
(1)
Chapter 07 – Job Costing
7-46. (continued)
Cash
53,700
(3)
28,500
(5)
32,400
(8)
Payroll
(5)
42,000
(6)
21,000
63,000
(7)
(7)
6,300
17,250
(10)
Balance 1/1
62,250
Goods Completed
86,325
98,775
Balance 1/31
49,800
Chapter 07 – Job Costing
7-47. (50 min.) Cost Flows Through Accounts: Brighton Services
a. T accounts.
Materials Inventory
137,200
(1a)
93,000
(1b)
94,000
(1c)
Wages Payable
490,000
(2a)
312,400
(2b)
197,600
(2c)
(Actual)
62,000
29,900
(3a)
(3b)
(3c)
(Actual)
104,000
(4a)
88,200
(4b)
17,000
(4c)
Chapter 07 – Job Costing
7-35
7-47. (continued)
Finished Goods Inventory
(a)
761,100
(b)
521,100
1,282,200
Cost of Goods Sold
1,282,200
b. Total Direct Labor Costs = $4,000,000.
Total Direct labor-hours
=
$4,000,000
= 200,000 hours.
$20 per Hour
Variable Manufacturing Overhead = .30 x $1,040,000 = $312,000.
Predetermined Variable Overhead Rate
=
$312,000
200,000
= $1.56 per Direct Labor-Hour.
Predetermined Fixed Overhead Rate
=
$728,000
200,000
= $3.64 per Direct Labor-Hour.
Chapter 07 – Job Costing
7-47. (continued)
c. T accounts
Materials Inventory
137,200
(1a)
93,000
(1b)
94,000
(1c)
Wages Payable
490,000
(2a)
312,400
(2b)
197,600
(2c)
(3a)
(3b)
56,857
(4b)
35,963
(4c)
(5) Underapplied
754,600
(a)
486,624
(b)
Chapter 07 – Job Costing
7-47. (continued)
Finished Goods Inventory
(a)
754,600
(b)
486,624
1,241,224
(5)
Sales Revenue ……………………………………..…….
Gross Margin …………………………..………………….
Less:
Marketing and Administrative Costs ………..…….
Chapter 07 – Job Costing
7-38
7-48. (60 min.) Show Flow Of Costs To Jobs: Kim’s Asphalt.
a.
1.
Payment received on account
Cash …………………………………………………………………………….
12,500
Accounts receivable ……………………………………………………
12,500
2.
Inventory purchase
Materials and equipment inventory …………………………………..
9,400
Accounts payable ……………………………………………………….
9,400
3.
Billing
Accounts receivable ……………………………………………………….
130,000
Sales revenue ……………………………………………………………
130,000
Cash …………………………………………………………………………….
75,000
Accounts receivable ……………………………………………………
75,000
4.
Indirect labor
Manufacturing overhead—Indirect labor …………………………...
650
Wages payable …………………………………………………………..
650
5.
Indirect materials issued
Manufacturing Overhead …………………………………………………
155
Materials and equipment inventory ………………………………..
155
6.
Overhead and advertising
Manufacturing Overhead [$550 + $675 + $320 + $200 + $325
+ $450] …………………………………………………………………………
2,520
Selling costs—Advertising ……………………………………………….
600
Cash …………………………………………………………………………
2,670
Accumulated Depreciation …………………………..……………….
450
7.
Charges to Work in Process
Work in process—materials and equipment
[$3,000 + $4,800 + $4,600 + $2,900] …………………………….
15,300
Work in process—direct labor
[$4,500 + $6,750 + $5,900 + $1,600] …………………………….
18,750
Work in process—overhead applied [30% x $18,750] …………
5,625
Materials inventory ……………………………………………………..
15,300
Wages payable …………………………………………………………..
18,750
Overhead applied ……………………………………………………….
5,625
8.
Transfer of Job 33
Cost of installations completed and sold …………………………...
100,200
Work in process—materials and equipment [$52,500 +
$4,800] ……………………………………………………………
57,300
Work in process—direct labor [$26,250 + $6,750] …………..
33,000
Work in process—overhead applied [30% x $33,000]………
9,900
Chapter 07 – Job Costing
7-39
Note: No finished goods inventory account is required.
7-48. (continued)
b.
Overhead analysis:
Applied (Entry 7) …………………………..
$5,625
Incurred
Entry 4 …………………………..
$650
Entry 5 …………………………..
155
Entry 6 …………………………..
2,520
3,325
Overapplied ………………………..…
$ 2,300
c. Inventory balances
Materials and Equipment Inventory
36,000
15,300
(7)
9,400
155
(5)
29,945
Work-in-process inventory
Balance 5/1
119,550
*
Current charges (7)
39,675
100,200
(8) Job 33
Balance 5/31
59,025
Cost of Goods Sold**
(8)
100,200
2,300
Overapplied
overhead
Balance 5/31
97,900
Chapter 07 – Job Costing
7-49. (70 min.) Reconstruct Missing Data: Toledo Farm Implements.
This is a challenging problem. We put the work in process account for May on the
board for the “big picture,” then solve for each item in the account as follows:
Work-in-Process
(a)
Balance, beginning
172,400
(b)
Direct materials
140,628
107,000
Transferred to
finished goods
(d)
(c)
Direct labor
135,400
408,028
Disaster loss
(f)
(e)
Overhead applied
66,600
Balance, ending
–0–
=
=
$140,628
*Purchases
=
Accounts payable, ending + Cash payments – Accounts
=
=
$132,800
( c)
Direct labor
=
Payroll – Indirect labor
=
=
$135,400
=
$107,000