Question

The following data were taken from the records of Cougar Enterprises, a Canadian manufacturer that uses a normal job-order costing system.

Case 3.50 a-c The following data were taken from the records of Cougar Enterprises, a Canadian manufacturer that uses a normal job-order costing system: Job Number Direct materials Direct labour Work in Process, December 1 70 75 80 $1,800 $2,400 $1,500 1,200 2,400 600 600 1,350 450 $3,600 $6,150 $2,550 Applied overhead Total During December, the company worked on jobs numbered 70 through 90 and incurred the following costs: Job Number Direct materials Direct labour Direct labour hours 70 75 80 85 90 Total $600 $900 $1,200 $1,350 $1,500 $5,550 $750 $1,500 $3,000 $2,250 $6,000 $13,500 50 100 200 150 400 900

Answer 1

Cougar Enterprises Requirement 1 Predetermined Overhead Rate = Total Overhead/Total Labor hours = 150000 / 12500 = $12 per direct labour hour 75 8590 80 2550 Totals 12300 70 WIP Beg. 3600 6150 Costs added : Direct Materials 600 900 Direct Labor 750 1500 Overhead 600 1200 5550 9750 COGS WIP direct labour hours for each job times $12 1200 3000 2400 9150 COGS 1350 2250 1800 5400 COGS 1500 6000 4800 12300 FG 5550 13500 10800 42150 Requirement 2 WIP at end of month includes Job 75 only $9750 Requirement 3 Direct materials used Direct labour Overhead applied Total manufacturing costs WIP - beginning WIP-ending Cost of goods manufactured 5550 13500 10800 29850 12300 -9750 32400 Check: jobs transferred out to Finished goods Job 70 Job 80 Job 85 Job 90 5550 9150 5400 12300 32400 Requirement 4 Cost of goods sold Finished goods, beginning Cost of goods manufactured Less finished goods inventory, ending (Job 90) 32400 -12300 20100 Check: jobs sold Job 70 5550 Job 80 9150 Job 85 5400 20100 Revenue = $20,100 x 2.5 = $50,250 Gross margin = $50,250 - 20,100 = $30,150