(L. OBJ. 2, 3, 4) Preparing and using a job cost record [30—35 min] True Technology, Co...

(L. OBJ. 2, 3, 4) Preparing and using a job cost record [30—35 min]

True Technology, Co., manufactures CDs and DVDs for computer software and entertainment companies. True uses job order costing and has a perpetual inventory system.

On April 2, True began production of 5,400 DVDs, job 423, for Stick people Pictures for $1.10 each. True promised to deliver the DVDs to Stick People by April 5. True incurred the following costs:

True Technology allocates manufacturing overhead to jobs based on the relation between estimated overhead ($560,000) and estimated direct labor costs ($450,000). Job 423 was completed and shipped on April 3.

Requirements

1. Prepare a job cost record similar to Exhibit 16-7 for job 423. Calculate the predetermined overhead rate, then apply manufacturing overhead to the job.

2. Journalize in summary form the requisition of direct materials and the assignment of direct labor and manufacturing overhead to Job 423.

3. Journalize completion of the job and the sale of the 5,400 DVDs.