Question

Exercise 2-6 (Part Level Submission)

A job cost sheet of Sandoval Company is given below. What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job? What is the predetermined manufacturing overhead rate? (Round answer to 0 decimal places e.g 135.) What are the total cost and the unit cost of the completed job? (Round unit cost to 2 decimal places, e.g. 1.25.)

A job cost sheet of Sandoval Company is given below.

Job Cost Sheet
JOB NO.		469		Quantity		2,500
ITEM		White Lion Cages		Date Requested		7/2
FOR		Todd Company		Date Completed		7/31
Date		Direct Materials		Direct Labor		Manufacturing Overhead
7/10		700
12		900
15				440		550
22				380		475
24		1,600
27		1,500
31				540		675

Cost of completed job:
Direct materials
Direct labor
Manufacturing overhead
Total cost
Unit cost

(1) What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?

		Source Documents
Direct materials		Materials requisition slipsPredetermined overhead rateTime tickets
Direct labor		Materials requisition slipsPredetermined overhead rateTime tickets
Manufacturing overhead		Materials requisition slipsPredetermined overhead rateTime tickets

(2) What is the predetermined manufacturing overhead rate? (Round answer to 0 decimal places e.g 135.)

Predetermined manufacturing overhead rate

%

(3) What are the total cost and the unit cost of the completed job? (Round unit cost to 2 decimal places, e.g. 1.25.)

Total cost of the completed job		$
Unit cost of the completed job		$

Answer 1

(a)      (1)     The source documents are:

                            Direct materials�Materials requisition slips.

                            Direct labor�Time tickets.

                            Manufacturing overhead� predetermined overhead rate.

          (2)     The predetermined overhead rate is 125% of direct labor cost. For example, on July 15, the computation is $550 � $440 = 125%. The same result is obtained on July 22 and 31.

          (3)     The total cost is:

                  

Direct Material [$700 + $900 + $1,600 + $1,500]	$4, 700
Direct Labor [$440 + $380 + $540]	$1,360
Manufacturing Overhead [$550 + $475 + $675]	$1,700
Total Cost	$7,760

                   The unit cost is $3.104 ($7,760 � 2,500).

(b)    

Date	Particulars	Dr.	Cr.
31-Jul	Finished Goods Inventory	$7,760
	Work in Process Inventory		$7,760

Answer 2

(a)      (1)     The source documents are:

                            Direct materials�Materials requisition slips.

                            Direct labor�Time tickets.

                            Manufacturing overhead�Predetermined overhead rate.

          (2)     The predetermined overhead rate is 120% of direct labor cost. For example, on July 15, the computation is $528 � $440 = 120%. The same result is obtained on July 22 and 31.

          (3)     The total cost is:

                            Direct materials........................................................................................            $4,825

                            Direct labor...............................................................................................            ?1,360

                            Manufacturing overhead........................................................................            1,632

                                                                                                                                                           $7,820

                   The unit cost is $3.91 ($7,820 � 2,000).

(b)     July 31 Finished Goods Inventory.............................................................           7,820

                                          Work in Process Inventory.......................................                              7,820