Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 3.55BP
Determine and record job costs (Learning Objectives 2, 3, 4, & 6)
Red Canyon Homes manufactures prefabricated chalets in Colorado. The company uses a perpetual inventory system and a
- a. Purchased materials on account, $470,000.
- b. Incurred total manufacturing wages of $115,000, which included both direct labor and indirect labor. Used direct labor in manufacturing as follows:
Direct Labor | |
Chalet 13 | $14,600 |
Chalet 14 | $28,000 |
Chalet 15 | $19,300 |
Chalet 16 | $21,400 |
- c. Requisitioned direct materials in manufacturing as follows:
Direct Materials | |
Chalet 13 | $41,500 |
Chalet 14 | $56,700 |
Chalet 15 | $62,700 |
Chalet 16 | $66,000 |
- d. Depreciation of manufacturing equipment used on different chalets, $6,500.
- e. Other
overhead costs incurred on Chalets 13–16:
Equipment rentals paid in cash | $10,000 |
Prepaid plant insurance expired | $ 6,000 |
- f. Allocated overhead to jobs at the predetermined rate of 60% of direct labor cost.
- g. Chalets completed: 13, 15, and 16.
- h. Chalets sold on account: 13 for $93,000; 16 for $144,000.
Requirements
- 1. Record the events in the general journal.
- 2. Open T-accounts for Work in Process Inventory and Finished Goods Inventory.
Post the appropriate entries to the T-accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. - 3. Summarize the job cost of the unfinished chalet, and show that this total amount equals the ending balance in the Work in Process Inventory account.
- 4. Summarize the job cost of the completed chalet that has not yet been sold and show that this equals the ending balance in Finished Goods Inventory.
- 5. Compute gross profit on each chalet that was sold. What costs must gross profit cover for Red Canyon Homes?
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Students have asked these similar questions
Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows:
Information
State University
On-the-Go Home
Precious Pre-school
Direct Materials Cost (food)
$54,100
$35,100
$79,700
Direct Labor Cost
$43,600
$41,400
$53,500
Labor Hours
3,210
3,690
4,120
The company applies overhead at a rate of $20.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $401,200. The allocated overhead for the month was $149,800, of which $129,200 should be credited to accounts payable and $41,700 should be credited to Accumulated Depreciation.
Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows:Job 201 $6,240Job 202 7,000Job 203 5,210Job 204 6,750Factory supervision 4,000Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $18 per direct labor hour. The direct labor rate is $40 per hour.a. Journalize the entry to record the factory labor costs.b. Journalize the entry to apply factory overhead to production for November.
Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows:
Information
State University
On-the-Go Home
Precious Pre-school
Direct Materials Cost (food)
$55,900
$37,200
$79,700
Direct Labor Cost
$43,500
$38,800
$53,100
Labor Hours
3,360
3,550
3,810
The company applies overhead at a rate of $16.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $406,800. The actual overhead for the month was $148,400, of which $118,600 should be credited to accounts payable and $41,500 should be credited to Accumulated Depreciation.Determine the costs that should be assigned to each of the jobs.
State University
On-the-Go Home
Precious Pre-school
TOTAL
Direct Materials
Direct Labor
Applied Overhead
Total Job Cost
Manufacturing Overhead
Debit
Credit
Chapter 3 Solutions
Managerial Accounting (5th Edition)
Ch. 3 - (Learning Objective 1) For which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 3) The amount of manufacturing...Ch. 3 - (Learning Objective 4) Which of the following is...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - (Learning Objective 5) Assuming the amount of...Ch. 3 - Prob. 8QCCh. 3 - Prob. 9QCCh. 3 - Prob. 10QC
Ch. 3 - Identify product costs, period costs, and product...Ch. 3 - Decide on product costing system (Learning...Ch. 3 - Determine the flow of costs between inventory...Ch. 3 - Understanding key document terms in a job cost...Ch. 3 - Compute a professional billing rate (Learning...Ch. 3 - Prob. 3.6SECh. 3 - Continuation of S3-6: compute total allocated...Ch. 3 - Continuation of S3-7: determine over- or under...Ch. 3 - Prob. 3.9SECh. 3 - Calculate job cost and billing at appliance repair...Ch. 3 - Calculating overallocated or underallocated...Ch. 3 - Prob. 3.12SECh. 3 - Record manufacturing labor costs (Learning...Ch. 3 - Prob. 3.14SECh. 3 - Prob. 3.15SECh. 3 - Understanding key terms (Learning Objectives 1, 2,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Prob. 3.18AECh. 3 - Determine the cost of a job and use it for pricing...Ch. 3 - Compute a predetermined overhead rate and...Ch. 3 - Prob. 3.21AECh. 3 - Prob. 3.22AECh. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Job cost and bid price at a consulting firm...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Understand the flow of costs in a job cost shop...Ch. 3 - Prob. 3.33BECh. 3 - Prob. 3.34BECh. 3 - Prob. 3.35BECh. 3 - Sustainability and job costing (Learning...Ch. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Prob. 3.43BECh. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Job costing or process costing for wedding...Ch. 3 - Discussion Questions 1. Why would it be...Ch. 3 - Unwrapped or How Its Made Go to www.YouTube.com...Ch. 3 - Ethics involved with choice of cost driver...Ch. 3 - Prob. 3.61ACTCh. 3 - Issues with cost of job (Learning Objectives 2, 3,...
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