Question

Using Job-Order Costing Documents [LO2 - CC4) Cycle Gear Corporation has incurred the following costs on job W456, an order for 20 special sprockets to be delivered at the end of next month: Direct materials: • On April 10, requisition number 15673 was issued for 40 titanium blanks to be used in the special order. The blanks cost $15 each. • On April 11, requisition number 15678 was issued for 420 hardened nibs also to be used in the special order. The nibs cost $1.25 each. Direct labour: . On April 12, Jamie Unser worked from 11:00 a.m. until 2:45p.m. on job W456. He is paid $12.60 per hour • On April 18, Melissa Chan worked from 8:15 a.m. until 11:30 a.m. on job W456. She is paid $13.20 per hour Required: 1. On what documents would these costs be recorded? 2. How much cost should have been recorded on each of the documents for job W456?

Answer 1

1)

Material Requisition Form

In job costing, whenever material is required to compelet specific job, it is withdrawn form the store. Material can be withdrawn with the documnet called Material requisition form which authorises such withdrawal specifying types and amount of material. It is very helpful for identifying job wise material consumtion.

Time Ticket/sheet

In job costing labour cost are recorded on document called Time sheet or time ticket.

2)

Direct material

In material requitision form , cost of material to be recorded are as follows:

Req no. 15673 - 40 titenium blanks * $15 = $600

Req no 15678 - 420 nibs * 1.25 = $525

Direct Labour

Time sheet of Jamie Unser -

3 hrs and 45mints  * 12.60 = $ 47.25

Time sheet of Mellica Chan -

3 hrs and 15 mints * 13.20 = $ 42.90

3)

Predetermined OHS rate 13.40 per hr

Actual Hrs 19800 hrs

Manufacturing ohs to be applied = 19800*13.40

= $265320

THis is the case of over allocation of overheads by amounting to $ 16320