Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Chapter 7, Problem 60P
Show Flow of Costs to Jobs
Kim’s Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $36,000. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs:
During May, Kim’s Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow:
Other May Events
- 1. Received $12,500 payment on Job 24 delivered to customer in April.
- 2. Purchased materials and equipment for $9,400.
- 3. Billed Pine Ridge Estates $130,000 and received payment for $75,000 of that amount.
- 4. Determined that payroll for indirect labor personnel totaled $650.
- 5. Issued supplies and incidental materials for current
jobs costing $155. - 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment
depreciation ):
Required
- a. Prepare
journal entries to record the flow of costs for operations during May. - b. Calculate the amount of over- or underapplied overhead for the month. This amount is debited or credited to Cost of Goods Sold.
- c. Determine inventory balances for Materials and Equipment Inventory and Work-in-Process Inventory.
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Manor Painting is a commercial Interior and exterior painting contractor specializing in commercial buildings. An Inventory of materials
and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as required. On August 1,
the Materials Inventory account had a balance of $54,000. The Work-in-Process Inventory account is maintained to record costs of
work not yet complete. There were two such jobs on August 1 with the following costs:
Materials and equipment
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Other August Events
Materials and equipment
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Overhead has been applied at 40 percent of the costs of direct labor using an annual rate.
During August, Manor Painting started two new jobs. Additional work was carried out on Jobs 84 and 87. Job 87 was completed and
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Required information
Use the following information to answer questions
[The following information applies to the questions displayed below]
The following information is available for Lock-Tite Company, which produces special-order security products and uses a
job order costing system.
April 30
May 31
Inventories
Rav materials
Work in process
$37,000
9,100
65,000
51,000
20,300
34,500
Finished goods
Activities and information for May
Rav materiale purchases (paid with cash)
Factory payroll (paid with cash)
177,000
200,000
Factory overhead
12,000
Indirect materials
Indirect labor
46,000
Other overhead costs
103,500
Sales (received in cash)
1,900,000
Predetermined overhead rate based on direct labor cost
554
Exercise 15-7 Cost flows in a job order costing system LO P1, P2, P3, P4
Compute the following amounts for the month of May using T-accounts.
1. Cost of direct materials used.
2. Cost of direct labor used.
3. Cost of goods manufactured
4. Cost of goods sold."
5. Gross profit.
6.…
ournal Entries and Simple Cost Sheet
Based on the following information. you are réquired to preparc the following
Journal entries
b T-account for work in process
c Simple cost sheets
d. Proof of work in process inventory. end
The Reuben Appliances Corp. started its operations in 200B It uses the job order
costing method and has adopted the voucher system to effectively control the flowof resources.
inventories and payables.
The transactions for the first quarter of the year are as follows:
) Materials purchases on account. P 50.000
2) Materials issued:
Job Order No. B-001
B-002.
P 7,500
13.000
B-003
6.250
3) Indirect materials issued. P 5.250
4) Payroli charges include indirect labor of P7.800. Dircct labor costs are as follows
Job Order No. B-001.
P 5.300
8.000
B-002.
....
B-003.
4.750
5) Factory overhead is charged to production at P3 per machine hour. Machine hours
utilized are as follows:
Job Order No. B-901.....
B-002...
1,200 machine hours
2.050 machi.e hours
1.400 machine hours…
Chapter 7 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 7 - What are characteristics of companies that are...Ch. 7 - Direct labor-hours and direct labor dollars are...Ch. 7 - What is the purpose of having two manufacturing...Ch. 7 - How does the accountant know what to record for...Ch. 7 - How is job costing in service organizations (for...Ch. 7 - What are the costs of a product using normal...Ch. 7 - Prob. 7RQCh. 7 - What are three common sources of improprieties in...Ch. 7 - In the context of job costing, what are projects?...Ch. 7 - Why do most companies use normal or standard...
Ch. 7 - Why is control of materials important from a...Ch. 7 - Worrying about the choice of an overhead...Ch. 7 - Prob. 13CADQCh. 7 - Interview the manager of a campus print shop or a...Ch. 7 - Would a dentist, an architect, a landscaper, and a...Ch. 7 - Consider two firms in the same industry. Is it...Ch. 7 - Prob. 17CADQCh. 7 - Assume that you have been asked to paint the...Ch. 7 - Prob. 19CADQCh. 7 - ABC Consultants works for only two clients: a...Ch. 7 - Prob. 21CADQCh. 7 - Assigning Costs to Jobs The following transactions...Ch. 7 - Assigning Costs to Jobs Sunset Products...Ch. 7 - Assigning Costs to Jobs Forest Components makes...Ch. 7 - Assigning Costs to Jobs Partially completed...Ch. 7 - Assigning Costs to Jobs Selected information from...Ch. 7 - Assigning Costs to Jobs Partially completed...Ch. 7 - Predetermined Overhead Rates Dixboro Company...Ch. 7 - Predetermined Overhead Rates Southern Rim Parts...Ch. 7 - Refer to the information in Exercise 7-29. Prepare...Ch. 7 - How much overhead was applied to each of the four...Ch. 7 - Refer to the information in Exercise 7-31. Prepare...Ch. 7 - Predetermined Overhead Rates Aspen Company...Ch. 7 - Prob. 34ECh. 7 - Applying Overhead Using a Predetermined Rate Marys...Ch. 7 - Applying Overhead Using a Predetermined Rate Turco...Ch. 7 - Calculating Over- or Underapplied Overhead Toms...Ch. 7 - Predetermined Overhead Rates: Ethical Issues...Ch. 7 - Compute the predetermined rate assuming that...Ch. 7 - Job Costing in a Service Organization At the...Ch. 7 - Job Costing in a Service Organization For August,...Ch. 7 - Job Costing in a Service Organization Allocation...Ch. 7 - Job Costing in a Service Organization TechMaster...Ch. 7 - Prob. 44ECh. 7 - Prob. 45ECh. 7 - Prob. 46PCh. 7 - Estimate Machine-Hours Worked from Overhead Data...Ch. 7 - Estimate Hours Worked from Overhead Data Capitol,...Ch. 7 - What will Wabash report as Cost of Goods Sold for...Ch. 7 - Assigning CostsMissing Data The following...Ch. 7 - Assigning Costs: Missing Data The following...Ch. 7 - Analysis of Overhead Using a Predetermined Rate...Ch. 7 - Analysis of Overhead Using a Predetermined Rate...Ch. 7 - Finding Missing Data A new computer virus...Ch. 7 - Cost Accumulation: Service Youth Athletic Services...Ch. 7 - Job Costs: Service Company For the month of July,...Ch. 7 - Job Costs in a Service Company On September 1, two...Ch. 7 - Tracing Costs in a Job Company The following...Ch. 7 - Cost Flows through Accounts Brighton Services...Ch. 7 - Show Flow of Costs to Jobs Kims Asphalt does...Ch. 7 - Reconstruct Missing Data A tornado struck the only...Ch. 7 - Find Missing Data IYF Corporation manufactures...Ch. 7 - Find Missing Data Accounting records for NIC...Ch. 7 - Incomplete Data: Job Costing Chelsea Household...Ch. 7 - Job Costing and Ethics Old Port Shipyards does...Ch. 7 - Job Costing and Ethics Chuck Moore supervises two...Ch. 7 - Job Costing and Ethics Global Partners is a...Ch. 7 - Prob. 68ICCh. 7 - What is the predetermined overhead rate for...
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