Costing_ JOb Costing_27 Jan

2.
The following cost data relate to the manufacturing activities of Black Company
during the just completed year:

Manufacturing
overhead costs:

Property
taxes, factory

$

2,800

Utilities,
factory

4,900

Indirect
labor

9,900

Depreciation,
factory

24,000

Insurance,
factory

5,900

Total
actual manufacturing overhead costs

$

47,500

Other
costs incurred:

Purchases
of raw materials

$

31,700

Direct
labor cost

$

40,300

Inventories:

Raw
materials, beginning

$

8,800

Raw
materials, ending

$

6,700

Work
in process, beginning

$

5,400

Work
in process, ending

$

6,600

The
company uses a predetermined overhead rate to apply overhead cost to jobs. The
rate for the year was $5 per machine-hour; a total of 11,100 machine-hours was
recorded for the year. All raw materials ultimately become direct
materials—none are classified as indirect materials.

1.

Compute the
amount of underapplied or overapplied overhead cost for the year. (Input
the amount as a positive value.
2. Prepare a schedule of cost of
goods manufactured for the year. (Input all amounts as positive
values.)

4.
Selected T-accounts for Rolm
Company are given below for the just completed year:
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1.

What was the cost of raw materials put into production during
the year?

2.

How much of the materials in (1) above consisted of indirect
materials?

3.

How much of the factory labor cost for the year consisted of
indirect labor?

4.

What was the cost of goods manufactured for the year?

5.

What was the cost of goods sold for the year (before
considering underapplied or overapplied overhead)?

6.

If overhead is applied to production on the basis of direct
materials cost, what predetermined rate was in effect during the
year?(Round
your answer to 2 decimal places.)

7.

Was manufacturing overhead underapplied or overapplied? By how
much?(Input
the amount as a positive value.)

8.

Compute the ending balance in the Work in Process inventory
account. Assume that this balance consists entirely of goods started during
the year. If $32,600 of this balance is direct materials cost, how much of
it is direct labor cost? Manufacturing overhead cost?(Round your
predetermined overhead rate percentage and final answers to 2 decimal
places.)

Ending
balance in the work in process $
Direct labor
cost $
Manufacturing
overhead cost $

6.
Job
218 was one of the many jobs started and completed during the year. The job
required $3,400 in direct materials and 500 hours of direct labor time at a
rate of $12 per hour. If the job contained 540 units and the company billed
at 75% above the unit product cost on the job cost sheet, what price per unit
would have been charged to the customer?

5.Southworth Company uses a job-order costing system and applies
manufacturing overhead cost to jobs on the basis of the cost of direct
materials used in production. Its predetermined overhead rate was based on a
cost formula that estimated $235,500 of manufacturing overhead for an
estimated allocation base of $157,000 direct material dollars.
The following transactions took
place during the year (all purchases and services were acquired on account):

a.

Raw
materials purchased, $152,000.

b.

Raw
materials requisitioned for use in production (all direct materials),
$145,000.

c.

Utility
bills incurred in the factory, $24,000.

d.

Costs
for salaries and wages were incurred as follows:

Direct
labor

$

218,000

Indirect
labor

$

79,300

Selling
and administrative salaries

$

143,000

e.

Maintenance
costs incurred in the factory, $16,000.

f.

Advertising
costs incurred, $120,000.

g.

Depreciation
recorded for the year, $50,000 (70% relates to factory assets, and the
remainder relates to selling and administrative assets).

h.

Rental
cost incurred on buildings, $85,000 (80% of the space is occupied by the
factory, and 20% is occupied by sales and administration).

i.

Miscellaneous
selling and administrative costs incurred, $14,000.

j.

Manufacturing
overhead cost was applied to jobs, $ ?

k.

Cost
of goods manufactured for the year, $551,000.

l.

Sales for the year (all on account) totaled $1,200,000. These
goods cost $530,000 according to their job cost sheets.

The balances in the inventory
accounts at the beginning of the year were as follows:

Raw
Materials 23000

$

Work
in Process 22000

$

Finished
Goods $32000

1. Prepare Journal
Entries to record A-L

2.

Post your entries to T-accounts. (Don’t forget to enter the
opening inventory balances above.) Determine the ending balances in the
inventory accounts and in the Manufacturing Overhead account.(Record the transactions in
the given order.)

3.

Prepare a schedule of cost of goods manufactured.(Input all amounts
as positive values.)

4.

Prepare a journal entry to close any
balance in the Manufacturing Overhead account to Cost of Goods Sold.
Prepare a schedule of cost of goods sold
5. Prepare Income
Statement for the Year