Question

Having trouble finishing this

T-Shirts Unlimited Following are a number of source documents for a custom T-shirt printing business. The business owner has approached you to help determine why the business is not making much money. The printing process uses a newly developed printer that uses special inks instead of a screen press. By avoiding the screen press process, the costs, labor and chemicals involved with making screens, cleaning screens, and cleaning presses is eliminated. Also, turnaround time is much faster. The new machine is similar to a large ink-jet printer. The designs are made using graphic arts software or uploaded image files. These files are then printed to the shirts by the printer. A simple heat bonding process completes the printing. Your assignment is to 1) post the entries to the appropriate job cost cards (job ledger sheets) and 2) to prepare a summary report showing the selling price, the total cost, and the profit or loss on each job. Basic data: -- shirts are sold for $12.00 each -- unprinted shirts cost $4.00 each -- ink cartidges for the printing cost $50.00 each and are not re-usable -- the labor rate is $15.00 per hour. (This covers salary and the employer payroll taxes.) -- total overhead for the year is budgeted to be $40,000.00 -- Overhead is to be allocated to each job based on direct labor hours. -- direct labor hours applied will be 2,000 hours per year. -- overhead is to be posted to each job cost card at the time that labor is posted. Therefore, the overhead is going to be allocated at the rate of: Calculation required !!!

Answer 1

Calculation for Overhead (OH) allocation - 40000$/2000Hrs = 20$ / hour

1.

Job # 129
Date incurred	Cost type	Cost
05-Mar	M	400
05-Mar	M	200
05-Mar	L	75
05-Mar	OH	100
10-Mar	M	50
10-Mar	L	60
10-Mar	OH	80
	Total Cost	965

Job # 130
Date incurred	Cost type	Cost
08-Mar	M	80
08-Mar	M	50
08-Mar	L	15
08-Mar	OH	20
	Total Cost	165

Job # 131
Date incurred	Cost type	Cost
10-Mar	M	48
10-Mar	M	50
10-Mar	L	15
10-Mar	OH	20
	Total Cost	133

Job # 132
Date incurred	Cost type	Cost
11-Mar	M	240
11-Mar	M	150
11-Mar	L	45
11-Mar	OH	60
	Total Cost	495

2.

Job # 129
Sales price	1200
Total Cost	-965
Profit	235

Job # 130
Sales price	240
Total Cost	-165
Profit	75

Job # 131
Sales price	144
Total Cost	-133
Profit	11

Job # 132
Sales price	720
Total Cost	-495
Profit	225