Question

The Film Company uses a job-order costing system. The following information pertains to the company's activities for the month of December:

On December 1, the company had two jobs in work in process as follows: Job 6 $20,000 and Job 8 $14,000

On December 1, the company had job in Finished Goods as follows: Job 10 $50,000

Jobs 12 and 13 were started during the month.

A. Materials were purchased on account in December for $54,000

B. Materials were requisitioned for use in production. The direct materials were distributed as follows:

Job #6 $6,000 Job #8 $8,000 Job #12 $23,000 Job #13 $7,000

C. Direct labor was incurred in December. The direct labor was distributed as follows:

Job #6 $30,000 Job #8 $20,000 Job #12 $35,000 Job #13 $10,000

D. Overhead is applied using camera hours. The budgeted overhead for the coming year is $1,000,000

Estimated camera hours is the cost driver and is 250,000 camera hours

The following is the distribution of Camera hours (CH) for December:

Job #6 3,000 CH Job #8 4,000 CH Job #12 11,000 CH Job #13 2,000 CH

E. Actual overhead for December was incurred for various indirect costs on account.  

Use a generic miscellaneous payable account in your journal entry. $75,000

F. Job Nos. 8 and 12 were completed during the month.

G. Job Nos.10 and 12 were sold to customers on account during December at 125% of cost

H. Any over-or underapplied overhead is closed to Cost of Goods Sold.

		Job 6		Job 8		Job 12		Job 13
Beginning Balance		$20,000		$14,000		$0		$0
Direct Materials		6,000		8,000		23,000		7,000
Direct Labor		30,000		20,000		35,000		10,000
Applied Overhead		12,000		16,000		44,000		8,000
Total		$68,000		$58,000		$102,000		$25,000

5. What is the ending WIP on December 31st. Give job number and dollar amt.

6. What is the ending balance in Finished goods on 12/31.Give job number and dollar amt.

7. Calculate the COGS for the month 12/31. Give job number and dollar amt.

8. Calculate the Total Sales for the month ending 12/31

9. Determine the over or under applied overhead for the month. Indicate whether the amount is under or over applied.

Answer 1

5. Ending WIP on December 31st: $93000

Job #6	68000
Job #13	25000
Total $	93000

6. Ending balance in Finished goods on 12/31: $58000

Job #8	58000
Total $	58000

7. COGS for the month 12/31: $152000

Job #10	50000
Job #12	102000
Total $	152000

8. Total Sales for the month ending 12/31 = 125% x $152000 = $190000

9. Over applied overhead $5000

Overheads incurred $75000 - Overheads applied $80000 = Over applied overhead $5000