Acct 349 version 3 chapter 2,3 Weygandt, J. J., Kieso, D. E., & Kimmel, P. D. (2005). Managerial accounting: Tools decision making (3rd ed.). Hoboken, NJ: John Wiley & Sons.
E2-11 Job cost related accounts law firm of Chan, King, and Lou and their manufacturing equivalents: Law Firm Accounts Manufacturing Firm Accounts Supplies Raw Materials Direct Attorney Cost Direct Labor Operating Overhead Manufacturing Overhead Work in Process Work in Process Cost of Completed Work Cost of Goods Sold Cost data month of March follow.
1. Purchased supplies on account $1,500.
2. Issued supplies $1,200 (60% direct and 40% indirect).
3. Time cards month indicated labor costs of $75,000 (80% direct and 20% indirect).
4. Operating overhead costs incurred totaled $40,000.
5. Operating overhead is applied at a rate of 90% of direct attorney cost.
6. Work completed totaled $100,000.
(a) Journalize the transactions . Omit explanations.
(b) Determine the balance of the Work in Process account. Use a T account.
E2-12 Armando Ortiz and Associates, a C.P.A. firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November. Hernandez Navarro Vallejo direct materials $600 $400 $200 Auditor labor costs $5,400 $6,600 $3,375 Auditor hours 72 88 45 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $50 per auditor hour. The Hernandez job is the only incomplete job at the end of November. Actual overhead month was $11,000.
(a) Determine the cost of each job.
(b) Indicate the balance of the Work in Process account at the end of November.
(c) Calculate the ending balance of the Manufacturing Overhead account .
P2-2B year ended December 31, 2005, the job cost sheets of Amend Company contained the following da job # ***** direct Materials direct Labor manufactured Overhead total Costs 7640 Balance 1/1 $25,000 $24,000 $28,800 $ 77,800 Current year’s costs 30,000 36,000 43,200 109,200 7641 Balance 1/1 11,000 18,000 21,600 50,600 Current year’s costs 40,000 48,000 57,600 145,600 7642 Current year’s costs 48,000 50,000 60,000 158,000
1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials was purchased on account.
2. Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.
3. Job No. 7640 and Job No. 7641 were completed during the year.
4. Job Nos. 7638, 7639, and 7641 were sold on account for $530,000.
5. Manufacturing overhead incurred on account totaled $115,000. 6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $20,000, and depreciation on factory machinery $8,000.
(a) Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work.
Hint: Use a single T account in Process Inventory. Calculate each of the following, then post each to the T account: (1) beginning balance,
(2) Direct materials,
(3) direct labor,
(4) manufacturing overhead, and
(5) completed jobs.
(b) Prepare the adjusting entry overhead, assuming the balance is allocated entirely to Cost of Goods Sold. (c) Determine the gross profit to be reported .
BYP 2-5 You are the management accountant Manufacturing. Your company does custom carpentry work and uses a job order cost accounting system. Clemente Job Order Cost Accounting PARLEX COMPANY Notes to the Financial Statements The Company’s products are manufactured on a job order basis to customers’ specifications. Customers submit requests on each job, and the Company prepares bids based on its own cost estimates. The Company attempts to reflect the impact of changing costs when establishing prices. However, during the past several years, the market conditions circuits and the resulting price sensitivity haven’t always allowed this.