Question

Job Cost Project-Accounting 2302
Need ASAP. Please help.

Step 1 You work for Thunderduck Custom Tables Inc. This is the first month of operations. The company designs and manufactures specialty tables. Each table is specially customized for the customer. This month. you have been asked to develop and manufacture two new tables for customers. You will design and build the tables. This is a no nail, no screw. and no glue manufacturing (no indirect materials used). You will be keeping track of the costs incurred to manufacture the tables using Job #1 Cost Sheet and Job #2 Cost Sheet. The cost of the direct materials that can be used to manufacture the table are as follows. These cost are on a per unit basis. Table Top $1,900.00 Table Leg $600.00 Drawer $390.00 The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours. The company estimates that there will be 12 direct labor hours worked during the month. The estimated manufacturing overhead cost for the month is: a. Factory supervisor salary per month b. Rent for the factory per month c. Depreciation of factory equipment per month Total Estimated manufacturing overhead $4.500.00 $1,500.00 $600.00 $6.600.00 What is the predetermined manufacturing overhead rate? Step 2 Step 3 The first order you received was to manufacture a table using a table top and four legs. This is your job #1. The customer that has ordered Job #2, wants a table that is the same as Job #1. but wants to also add a drawer to the table.

Answer 1

1. Predetermined manufacturing overhead rate = Estimated Total Manufacturing Overhead / Estimated Total Direct Labor Hours = $ 6,600 / 12 = $ 550 per DLH.

2.

Date	Description	Debit	Credit
		$	$
Dec 1	Raw Materials	19,000
	Accounts Receivable		19,000
Dec 5	Work in Process	4,300
	Raw Materials		4,300
Dec 10	Work in Process	150
	Manufacturing Overhead	5,000
	Salaries and Wages Expense	2,000
	Salaries and Wages Payable		7,150
Dec 15	Work in Process	4,690
	Raw Materials		4,690
Dec 16	Manufacturing Overhead	1,500
	Accounts Payable		1,500
Dec 17	Advertising Expense	1,200
	Accounts Payable		1,200
Dec 20	Manufacturing Overhead	150
	Depreciation Expense	600
	Accumulated Depreciation		750
Dec 22	Work in Process ( 3 x 2 x $ 550)	3,300
	Manufacturing Overhead		3,300
Dec 26	Finished Goods	7,750
	Work in Process		7,750
Dec 28	Accounts Receivable	24,000
	Sales Revenue		24,000
Dec 28	Cost of Goods Sold	7,750
	Finished Goods		7,750
Dec 31	Work in Process	75
	Salaries and Wages Payable		75
Dec 31	Work in Process	1,650
	Manufacturing Overhead		1,650
Dec 31	Cost of Goods Sold	1,700
	Manufacturing Overhead		1,700

Thunder Duck Custom Tables Inc. Schedule of Cost of Goods Sold For the month ended December 31, 20XX
Direct materials used
Beginning raw materials	$ 0
Add: Raw materials purchased	19,000
Less: Ending raw materials	(10,010)	$ 8,990
Direct labor		225
Manufacturing overhead		4,950
Total manufacturing costs		14,165
Add: Beginning work in process		0
Total cost of work in process		14,165
Less: Ending work in process		6,415
Cost of Goods Manufactured		$ 7,750

Thunder Duck Custom Tables Inc. Schedule of Cost of Goods Sold For the month ended December 31, 20XX
Beginning finished goods	$ 0
Add: Cost of goods manufactured	7,750
Cost of goods available for sale	7,750
Less: Ending finished goods	0
Unadjusted Cost of Goods Sold	7,750
Add: Underapplied manufacturing overhead	1,700
Adjusted Cost of Goods Sold	$ 9,450

Thunder Duck Custom Tables Inc. Income Statement For the month ended December 31, 20XX
Sales Revenue
Cost of Goods Sold
Gross Profit		14,550
Selling and Administrative Expenses
Advertising expense	$ 1,200
Salaries and wages expense	2,000
Depreciation expense	600	3,800
Net Income		$ 10,750