Question

L. Journalizing Transactions, completinga job cost sheet; calculating overhead Instructions a. Follow instructions in numbers 1 & 2. **The job cost sheet is shown below. For #1 just name the sheet "Job 300" b. Journalize numbers 3-8 and 10 12;**Number 9 just requires you to calculate the total cost of the job 1. Create a job cost sheet for Job 300 2. Estimated annual overhead costs: $122,850; Cost driver identified: Direct labor cost; estimated annual direct labor cost: $117,000; Calculate the pre-determined overhead rate 3. Purchased raw material on account $60,000 Incurred $28,000 in factory labor costs, of which $3000 was employer payroll taxes S.Actual OH costs were as follows: a. Factory utilities: $2,500 b.Factory rent: $3,000 (prepaid) c. Factory insurance: S1650 (prepaid) Repairs: $800 (charge to accounts payable) Depreciation: $1,200 Requisitioned $25,000 of material; $21,000 4 d was for Job 300 and the 6 remainder was indirect material Assigned $28,000 in factory labor costs; $20,000 was for Job 300; remainder was indirect labor 7 . Calculate the amount of overhead too apply if total direct labor cost for the period equals $20,000 (journalize the transaction) 9. Calculate the cost of job 300 (which has been completed) 10. Transfer job 300 to finished goods 1.Job 300 was sold on account for $71,000 12. Calculate over or under applied overhead; prepare adjusting entry Direct Materials Direct Labor Man. Overhead Total Joh Cost

Answer 1

1) 1) Job Cost Sheet for Job 300 Presented right-hand side Trans. # D. Material D. Labor. Overhead $122,850 $117,000 105% of direct labor cost ($122850 $117000 105 % ) $21,000 2) Estimated annual overhead cost 6) $20,000 Estimated direct labor cost 8 $21,000 Pre-determined overhead rate $21,000 $20,000 $21,000 Total Cost Account Titles & Explanation Credit 3) Raw materials inventory Accounts payable Debit $60,000 Total costs of job-300 completed $62,000 ($21000 $20000 $21000) $60,000 Credit 4) Account Titles & Explanation Debit Credit 10) Account Titles & Explanation Debit Factory payroll cost Wages payable $28,000 Finished Goods Inventory Work in process - Job 300 (Total cost as calculated in Part-9) $62,000 $28,000 $62,000 Account Titles & Explanation Credit 5) Factory overhead Utilities payable Debit $9,150 [Sum of all overhead costs] 11) Account Titles & Explanation Debit Credit $2,500 $3,000 $1,650 $800 $1,200 $71,000 Accounts Receivable $71,000 Prepaid rent Prepaid insurance Accounts payable Accumulated depreciation Sales Revenue (To record job-300 sold on account) $62,000 Cost of Goods Sold Finished Goods Inventory (To record cost of job-300 sold) $62,000 Account Titles & Explanation 6) Debit Credit

Work in process - Job 300 Factory overhead Raw materials inventory $21,000 $2,500 $3,000 $1,650 $800 $1,200 $4,000 $8,000 $21,150 $21,000 $150 Utilities 12 [$25000-$21000] $4,000 Rent $25,000 Insurance Repairs Depreciation Account Titles & Explanation Work in process - Job 300 Factory overhead Factory payroll cost 7) Debit Credit $20,000 $8,000 Indirect materials [$28000-$20000] Indirect labor $28,000 Actual factory overhead costs incurred Factory overhead costs applied (Ref: Part-8) Under-applied factory overhead cost 8 Account Titles & Explanation Work in process - Job 300 Debit Credit $21,000 [$20000 x 105%] (Diff. between actual & applied overhead -$21150 -$21000= $150) Factory overhead $21,000 Therefore, Account Titles & Explanation Debit Credit $150 Cost of Goods Sold $150 Factory overhead