Question

Date Materials Requisition Description Amount No. 11/30 437 60 pounds rubber at $14 $ 840 12/2 439 $ 480 40 meters polyester fabric at $12 12/3 501 100 meters steel cord at $8 S 800 Durable Tire allocates manufacturing overhead to jobs on the basis of the relationship between expected overhead costs ($529,000) and expected direct labor hours (23,000). Job 298 was completed on December 3 and shipped to ATV on December 5. Requirements 1. Prepare a job cost record for Job 298. 2. Calculate the total profit and the per-unit profit for Job 298. P3-55B Determine and record job costs (Learning Objectives 2, 3, 4,&6) Red Canyon Homes manufactures prefabricated chalets in Colorado. The company uses a perpetual inventory system and a job cost system in which each chalet is a job. The following events occurred during May: a. Purchased materials on account, $470,000. b. Incurred total manufacturing wages of $115,000, which included both direct labor and indirect labor. Used direct labor in manufacturing as follows:

Answer 1

Req. 1

Journal
DATE	ACCOUNTS AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT
	a.	Raw Materials Inventory		470,000
		Accounts Payable			470,000
	b.	Work in Process Inventory (14,600 + 28,000 + 19,300 + 21,400)		83,300
		Manufacturing Overhead		31,700
		Wages Payable			115,000
	c.	Work in Process Inventory (41,500 + 56,700 + 62,700 + 66,000)		226,900
		Raw Materials Inventory			226,900
	d.	Manufacturing Overhead		6,500
		Accum. Depr. — Equipment			6,500
	e.	Manufacturing Overhead		16,000
		Cash			10,000
		Prepaid Insurance			6,000
	f.	Work in Process Inventory ($83,300 × 0.60)		49,980
		Manufacturing Overhead			49,980

Req. 1

Journal
DATE	ACCOUNTS AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT
	g.	Finished Goods Inventoryc		258,680
		Work in Process Inventory			258,680
	h.	Accounts Receivable ($93,000 + $144,000)		237,000
		Sales Revenue			237,000
		Cost of Goods Sold (64,860 + 100,240)		165,100
		Finished Goods Inventory			165,100

c Completed:

13: 14,600 + 41,500 + (14,600 x 0.6) =       64,860

15: 19,300 + 62,700 + (19,300 x 0.6) =       93,580

16: 21,400 + 66,000 + (21,400 x 0.6) =     100,240

                                                                                                                                                $258,680

Req. 2

Work in Process Inventory		Finished Goods Inventory
(b)	83,300	(g)	258,680		(g)	258,680	(h)	165,100
(c)	226,900				Bal.	93,580
(f)	49,980
Bal.	101,500

Req. 3

Red Canyon Homes
Reconciliation of Work in Process Inventory Subsidiary
and Control Accounts
	Chalet #14
Unfinished chalet (#14):
Direct materials	$ 56,700
Direct labor	28,000
Manufacturing overhead (60% of labor)	16,800
Total cost = Work in process balance	$101,500

Req. 4

Red Canyon Homes
Reconciliation of Finished Goods Inventory Subsidiary
and Control Accounts
	Chalet #15
Completed, unsold chalet (#15):
Direct materials	$ 62,700
Direct labor	19,300
Manufacturing overhead (60% of labor)	11,580
Total cost equals finished goods balance	$ 93,580

Req. 5

Red Canyon Homes
Gross Profit on Chalets Sold in May
	Chalet #13	Chalet #16
Sales revenue	$93,000	$144,000
Cost of goods sold	(64,860)	(100,240)
Gross profit	$28,140	$ 43,760

The gross profit must cover these types of expenses

Administration

·Customer Service

·Design

·Distribution

·Marketing

·Research and Development