Question

Question 2 View Policies Current Attempt in Progress Waterways has two major public park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain, which will require special-order, sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December Raw materials were requisitioned from the company's inventory on December 2 for $5067; on December 8 for $1.065; and on December 14 for $3459. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52 Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $17.5 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for 57 and the rest for K52. The predetermined overhead rate is based on machine hours. The expected machine hour use for the year is 2,097 hours and the anticipated overhead costs are $830,412 for the year. The machines were used by workers on projects K52 and 57 on December 3, 9 and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hours were used for project J572.5 the first day and 3 each of the other days). Both of these special orders were completed on December 15, producing 200 sprinkler heads for J57 and 100 sprinkler heads for K52. Additional job order activities during this period included: Dec. 1 Purchased raw materials from Durbin Supply Company on account for $53,400. Dec. 2 Issued $40,300 of direct materials from the company's inventory to jobs other than K52 and J57 and $3. 100 of indirect materials. Dec. 12 Paid Waterways factory salaries and wages for $64.700. Dec 13 Paid the factory's water bill of $9.100. Dec. 18 Transferred $50,300 of costs from other completed jobs to finished goods. Dec. 21 Paid the factory's electric bill of $11.900 for Waterways' factory. Dec 31 Made adjusting entries forth factory that included accrued property taxes of $12, 100, prepaid insurance of $8.900, and accumulated depreciation of $16,100 Set up the job cost sheets for Job No. 57 and Job No. K52. Determine the total cost for each manufacturing special order for these jobs. (Round unit costs to 2 decimal places, es 12.25.) Job No. 357 Job No. K52 Total Cost $ Unit Cost $ eTextbook and Media List of Accounts

Answer 1

	Job No. J57	Job No. K52
Total Cost $	$        9,970	$         5,678
Unit Cost $	$        49.85	$         56.78

Working:

Predetermined overhead rate = $830412/2097 hours = $396 per machine hour

Date	Description	Job J57	Job K52
12/2	Direct materials	3378	1689
12/3	Direct labor	70	35
12/3	OH	990	792
12/8	Direct materials	710	355
12/9	Direct labor	70	35
12/9	OH	1188	792
12/14	Direct materials	2306	1153
12/15	Direct labor	70	35
12/15	OH	1188	792
	Total cost $	9970	5678
	Number of units	200	100
	Unit cost $	49.85	56.78

Date	Account Titles and Explanations	Debit	Credit
12/1	Raw Materials Inventory	53400
	Accounts Payable		53400
	(Purchase of raw materials on account)
12/2	Work in Process Inventory	5067
	Raw Materials Inventory		5067
	(To assign materials to jobs J57 & K52)
12/2	Work in Process Inventory	40300
	Manufacturing Overhead	3100
	Raw Materials Inventory		43400
	(To assign materials to jobs and overhead)
12/3	Work in Process Inventory	105
	Factory Labor (6 hours x $17.50)		105
	(To assign labor to jobs J57 & K52)
12/3	Work in Process Inventory	1782
	Manufacturing Overhead [(2.5 + 2) x $396]		1782
	(To assign overhead to jobs J57 & K52)
12/8	Work in Process Inventory	1065
	Raw Materials Inventory		1065
	(To assign materials to jobs J57 & K52)
12/9	Work in Process Inventory	105
	Factory Labor		105
	(To assign labor to jobs J57 & K52)
12/9	Work in Process Inventory	1980
	Manufacturing Overhead [(3 + 2) x $396]		1980
	(To assign overhead to jobs J57 & K52)
12/12	Factory Labor	64700
	Cash		64700
	(To record factory labor costs and payment)
12/13	Manufacturing Overhead	9100
	Cash		9100
	(To record payment of factory water bill)
12/14	Work in Process Inventory	3459
	Raw Materials Inventory		3459
	(To assign materials to jobs J57 & K52)
12/15	Work in Process Inventory	105
	Factory Labor		105
	(To assign labor to jobs J57 & K52)
12/15	Work in Process Inventory	1980
	Manufacturing Overhead [(3 + 2) x $396]		1980
	(To assign overhead to jobs J57 & K52)
12/15	Finished Goods Inventory ($9970 + $5678)	15648
	Work in Process Inventory		15648
	(To record completion of jobs K57 & K52)
12/18	Finished Goods Inventory	50300
	Work in Process Inventory		50300
	(To record completion of other jobs)
12/21	Manufacturing Overhead	11900
	Cash		11900
	(To record payment of factory electric bill)
12/31	Manufacturing Overhead	37100
	Property Taxes Payable		12100
	Prepaid Insurance		8900
	Accumulated Depreciation		16100
	(To record overhead costs)

Note: Explanations have been provided after each journal entry for better understanding.

Manufacturing overhead has been under-applied.

Date	Account Titles and Explanations	Debit	Credit
12/31	Cost of goods sold	3600
	Manufacturing Overhead		3600
	(To close the under-applied manufacturing overhead)