MA14 Problem: Job Order Costing – Valani Corporation

MA14 Problem: Job Order Costing – Valani Corporation

 The Valani Corporation manufactures made-to-order widgets and uses a normal job order costcosting system. During the month of August, the following jobs were worked on and thefollowing costs incurred.

 Job A4Job A5Job A6Job A7 

Total 

Balance in openingWork in Process

$5,600$7,800- -

$13,400Costs added duringAugust -Direct materials

10,00020,000$16,000$4,000

50,000Direct labour 

5,0004,0003,0001,500

13,500

Job status at end of August

SoldCompleteIn FGInventoryCompleteIn FGInventory In WIPInventory

Valani’s controller budgeted total overhead costs to be $600,000 and budgeted direct labour costto be $150,000. Overhead is allocated on the basis of direct labour cost. The company marks uptheir jobs at 40% over cost. There were no opening finished goods inventories.

 Required – 

Prepare all journal entries relative to these jobs for the month of August