Question

Classic Technology Co. manufactures DVDs for computer software and entertainment companies. Classic uses job order costing. On June 2, Classic began production of 5,400 DVDs, Job 423, for Digital Pictures for $1.10 sales price per DVD. Classic promised to deliver the DVDs to Digital Pictures by June 5. Classic incurred the following direct costs: (Click the icon to view the costs.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Prepare a job cost record for Job 423. Calculate the predetermined overhead allocation rate (round to two decimal places); then allocate manufacturing overhead to the job. Begin by determining the total amount of direct materials and direct labor incurred on the job. Next, calculate the predetermined overhead allocation rate and apply manufacturing overhead to the job. Lastly, compute the total cost of Job 423 and the cost per DVD. i More Info O Data Table Job Cost Record Job No. 423 Customer Name Job Description Date Promised 6-5 Digital 5,400 DVDs Classic Technology allocates manufacturing overhead to jobs based on the relation between estimated overhead of $667,000 and estimated direct labor costs of $460,000. Job 423 was completed and shipped on June 3. Date 6/02 6/03 Labor Time Record No. 655 656 Description 10 hours @ $18 per hour 20 hours @ $13 per hour Amount $180 260 Direct materials Print Done Materials Requisition Number Date Amount Requisition No. i Requirements Date 6/02 6-2 6-2 Description 31 lbs. polycarbonate plastic @ $12 per lb. 25 lbs. acrylic plastic @ $29 per lb. 3 lbs. refined aluminum @ $42 per lb. Amount $ 372 725 6/02 6/03 1. Prepare a job cost record for Job 423. Calculate the predetermined overhead allocation rate (round to two decimal places); then allocate manufacturing overhead to the job. 2. Journalize in summary form the requisition of direct materials and the assignment of direct labor and the allocation of manufacturing overhead to Job 423. Wages are not yet paid. 3. Journalize completion of the job and the sale of the 5,400 DVDs on account Print Done Enter any number in the edit fields and then click Check A Print Done A parts O Ular remaining Check Answer

Answer 1

Answer-1:

Job Cost Sheet Job Number 423 Unit completed 5,400 Customer Digital Picture Jobs description DVDs Date initiated June 2 Date completed June3 Direct Material | Reg No. Amount 63 $372 725 126 $1223 Direct Labour Record No. Hours A mount 655 10 $180 656 260 $440 Manufacturing Overhead DL Cost Rate Amount 440 1.45 $638 64 74 $1,223 440 Date June 3 Units shipped Number Balance 5,400 Cost Summary Direct Materials Direct Labour Manufacturing overheads Total cost Unit product cost 638 $2,301 0.43* *$2,301/5,400 units = $0.43 per DVD

Pre-detremined overhead allocation rate = $667,000/$460,000 = $1.45 per direct labour cost

Answer-2:

Debit (US $) Credit (US $) 372 GENERAL JOURNAL Date Account Work in process inventory June.02 Raw materials Work in process inventory June.02 Raw materials Work in process inventory June.03 Raw materials Work in process inventory June.02 Wages payable Work in process inventory June.03 Wages payable Work in process inventory June.03 Manufacturing overhead 180 260 638 638

Answer-3:

Date June.03 GENERAL JOURNAL Account Finished goods inventory Work in process inventory Finished goods inventory Work in process inventory Account receivable Sales Cost of goods sold Finished goods inventory Debit (US $) Credit (US $) 2,301 2,301) 2,301 2,301 June.03 5,940 June.03 5,940 2,301 June.03 2,301)

Job Cost Sheet Job Number 423 Unit completed 5,400 Customer Digital Picture Jobs description DVDs Date initiated June 2 Date completed June3 Direct Material | Reg No. Amount 63 $372 725 126 $1223 Direct Labour Record No. Hours A mount 655 10 $180 656 260 $440 Manufacturing Overhead DL Cost Rate Amount 440 1.45 $638 64 74 $1,223 440 Date June 3 Units shipped Number Balance 5,400 Cost Summary Direct Materials Direct Labour Manufacturing overheads Total cost Unit product cost 638 $2,301 0.43* *$2,301/5,400 units = $0.43 per DVD

Debit (US $) Credit (US $) 372 GENERAL JOURNAL Date Account Work in process inventory June.02 Raw materials Work in process inventory June.02 Raw materials Work in process inventory June.03 Raw materials Work in process inventory June.02 Wages payable Work in process inventory June.03 Wages payable Work in process inventory June.03 Manufacturing overhead 180 260 638 638

Date June.03 GENERAL JOURNAL Account Finished goods inventory Work in process inventory Finished goods inventory Work in process inventory Account receivable Sales Cost of goods sold Finished goods inventory Debit (US $) Credit (US $) 2,301 2,301) 2,301 2,301 June.03 5,940 June.03 5,940 2,301 June.03 2,301)