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.

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

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

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

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

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

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

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

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

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

Question

What is the ending balance in Work in Process on December 31. Give the applicable Job number(s), dollar amount for each job, and total ending Work in Process.

What is the ending balance in finished goods on December 31. Give the applicable Job number(s), dollar amount for each job, and total ending Finished Goods.

Calculate the cost of goods sold for the month ending December 31. Give the applicable Job number(s), dollar amount for each job, and total for Cost of Goods Sold.

Answer 1

Pre-determined overhead rate = Estimated Overhead/Estimated Camera hours
Pre-determined overhead rate =1000000/250000 = $4 per camera hour
JOB DETAILS:
Job	6	8	10 (FG OB)	12	13	Total Cost	Selling price
OB	20000	14000				34000
D.MATERIAL	6000	8000		23000	7000	44000
D. LABOR	30000	20000		35000	10000	95000
OVERHEAD	3000*4=12000	16000		44000	8000	80000
Total	68000	58000	50000	102000	25000	253000
COMPLETED		FG 58000				58000
WIP	WIP 68000				WIP 25000	93000
SOLD			SOLD50000	SOLD102000		152000	152000*1.25=190000
Req 1) Ending Work in Process on Dec 31 =
	Job 6	Job 13	Total
WIP	68000	25000	93000
Req 2) Ending FG on Dec 31 =
	Job 8
Completed	58000
Req 3) COGS for the month Dec = Unadjusted COGS - Over-applied overhead
152000 - (80000 - 75000) = $147000