Question 1 - Flow of Costs in Job Order Costing
The information below was taken from the job cost sheets of Bates Company.
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Job Number
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Manufacturing Costs as of June 30
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Manufacturing
Costs in July
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101
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$4,100
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102
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3,500
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103
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860
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$2,000
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104
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2,400
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3,800
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105
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5,500
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106
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3,400
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During July, jobs no. 103 and 104 were completed, and jobs no. 101, 102, and 104 were delivered to customers. Jobs no. 105 and 106 are still in process at July 31.
a. Compute the work in process inventory at June 30.
b. Compute the finished goods inventory at June 30.
c. Compute the cost of goods sold during July.
d. Compute the work in process inventory at July 31.
e. Compute the finished goods inventory at July 31.
Question 2 - Journal Entries in Job Order Costing
Riverside Engineering is a machine shop that uses job order costing. Overhead is applied to individual jobs at a predetermined rate based on direct labor costs. The job cost sheet for job no. 321 appears below.
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JOB COST SHEET
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JOB NUMBER: 321
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DATE STARTED: May 10
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PRODUCT: 2" Brass Check Valves
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DATE COMPLETED: May 21
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UNITS COMPLETED: 4000
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Direct materials used
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$7,900
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Direct labor
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1,300
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Manufacturing overhead applied
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3,100
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Total cost of job no. 321
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$12,300
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Unit cost ($12,300 ÷ 4,000 units)
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$3.08
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a. Summarize the manufacturing costs charged to job no. 321.
b. Record the completion of job no. 321.
c. Record the credit sale of 2,200 units from job no. 321 at a unit sales price of $5. Record in a separate entry the related cost of goods sold.
Required - Prepare general journal entries to the above statements.
Question 3 - A Job Order Costing: Computations and Journal Entries
Chesapeake Sailmakers uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appears in the company's Work in Process Inventory account for the month of June:
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Debits to account:
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Balance, June 1
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$7,200
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Direct materials
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13,000
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Direct labor
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9,400
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Manufacturing overhead (applied to jobs as 150% of direct labor cost)
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14,000
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Total debits to account
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$43,600
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Credits to account:
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Transferred to Finished Goods Inventory account
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33,200
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Balance, June 30
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$10,400
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a. Assuming that the direct labor charged to the jobs still in process at June 30 amounts to $2,200, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30.
b. Prepare general journal entries to summarize:
1. The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June.
2. The transfer of production completed during June to the Finished Goods Inventory account.
3. The cash sale of 90 percent of the merchandise completed during June at a total sales price of $50,000. Show the related cost of goods sold in a separate journal entry.
Question 4 - A Job Order Costing: Journal Entries and Cost Flows
The following information relates to the manufacturing operations of O'Shaughnessy Mfg. Co. during the month of March. The company uses job order costing.
a. Purchases of direct materials during the month amount to $53,000. (All purchases were made on account.)
b. Materials requisitions issued by the Production Department during the month total $53,000.
c. Time cards of direct workers show 2,000 hours worked on various jobs during the month, for a total direct labor cost of $32,000.
d. Direct workers were paid $28,000 in March.
e. Actual overhead costs for the month amount to $35,000 (for simplicity, you may credit Accounts Payable).
f. Overhead is applied to jobs at a rate of $18 per direct labor hour.
g. Jobs with total accumulated costs of $120,000 were completed during the month.
h. During March, units costing $140,000 were sold for $220,000. (All sales were made on account.)
Prepare general journal entries to summarize each of these transactions in the company's general ledger accounts.