Question

Waterways has two major public park projects to provide with comprehensive irrigation in one of its service locations this month Job 157 and Job K52 involve 15 acres of landscaped terrain, which will require special order, sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December Raw materials were requisitioned from the company's inventory on December 2 for $5,094; on December 8 for $1,056; and on December 14 for $3,468. In each instance, two-thirds (2/3) of these materials were for 157 and the rest for K52. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $15.5 per hour. The time tickets were dated December 3, December 9, and December 15. on each of those days, o labor hours were spent on these jobs, two-thirds (2/3) for 157 and the rest for K52. The predetermined overhead rate is based on machine hours. The expected machine hour use for the year is 2,115 hours, and the anticipated overhead costs are $854,460 for the year. The machines were used by workers on projects K52 and 57 on December 3, 9, and 15. Six machine hours were used for project KS2 (2 each day), and 8.5 machine hours were used for project 57 (2.5 the first day and 3 each of the other days). Both of these special orders were completed on December 15, producing 200 sprinkler heads for 357 and 100 sprinkler heads for K52. Additional job order activities during this period induded: Dec. 1 Dec. 2 Dec. 12 Dec. 13 Dec. 18 Dec. 21 Dec. 31 Purchased raw materials from Durbin Supply Company on account for $53,400. Issued $40,300 of direct materials from the company's inventory to jobs other than K52 and 57 and $3,100 of indirect materials. Paid Waterways' factory salaries and wages for $65,500. Paid the factory's water bill of $9,100. Transferred $50,200 of costs from other completed jobs to finished goods. Paid the factory's electric bill of $12,000 for Waterways' factory. Made adjusting entries forth factory that included accrued property taxes of $12,100, prepaid insurance of $8,700, and accumulated depreciation of $16,000.

Answer 1

PARTICULARS J57 K52

RAW MATERIAL $6412 $3206

LABOUR $186 $93

OVERHEAD(MACHINE)       $2424(404*6HRS)   $3434(404*8.5HRS)

TOTAL COST $9022 $6733

UNIT PRODUCED 200 100

UNIT COST 45.11 67.33

WORKINGS

1) MACHINE HOURS- 2115

OVERHEAD COST- $ 854460

MACHINE HOURS RATE- $854460/2115= $404 PER HOUR

2)  FIXED COST ARE NOT ALLOCATED TO SPECIAL ORDER SO SALARY, WATERBILL AND SO ON ARE NOT ALLOWED TO BE ALLOCATED TO SPECIAL ORDER.