Managerial Accounting p2-3

Problem P2-3 Job-Order Costing: Inventory Accounts and Cost of Goods Sold

Smith Die Company manufactures cutting dies for the shoe industry. Each set of dies is custom designed to a customer's templates. During the first week of May, six orders were received from customers. They were assigned job numbers 1005-1010. The following transactions occurred during the first week of May.

Received shipment of steel from Eastern City Steel costing

$5,000

Received and paid for supplies (indirect materials) from Mallard Supply costing

$2,300

Material requisitions indicated that materials were issued to the factory floor as follows:

Job Number:

Direct Materials:

Indirect Materials:

1005

$600

1006

800

1007

1,500

1008

600

1009

400

1010

300

Totals

$4,200

$800

The labor time ticket summary reflected the following costs for the week:

Job Number:

Direct Labor:

Indirect Labor:

1005

$1,500

1006

1,900

1007

3,200

1008

1,300

1009

800

1010

600

Totals

$9,300

$6,400

Overhead was applied to all jobs in process at

180%

of direct labor cost. Jobs 1005, 1006, 1007, and

1008 were completed and transferred to finished goods. Jobs 1009 and 1010 were still in process at the end of the week.

Jobs 1005, 1006, 1007 and 1008 were shipped to customers and billed at

150%

of total job cost.

Required:

Part a. Calculate the total cost of each job.

Cost of Jobs:

1005

1006

1007

1008

1009

1010

Material

Amount

Labor

Amount

Overhead

Amount

Total

Formula

Part b. Prepare journal entries to record the above information.

Account Title

Amount

Account Title

Amount

Text line

Account Title

Amount

Account Title

Amount

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Account Title

Amount

Account Title

Amount

Account Title

Amount

Text Line

Account Title

Amount

Account Title

Amount

Account Title

Amount

Text Line

Account Title

Amount

Account Title

Amount

Text line

Account Title

Amount

Account Title

Amount

Text line

Account Title

Amount

Account Title

Amount

Account Title

Amount

Account Title

Amount

Text line

11 years ago

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