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Exercise 1--Cost accumulation procedure determination:
Classify these industries with respect to the type of cost accumulation procedure generally used--job order costingor process costing. a. Meat| k. Pianos|
b. Sugar| l. Linoleum|
c. Steel| m. Leather|
d. Breakfast cereal| n. Nylon|
e. Paper boxes| o. Baby foods|
f. Wooden furniture| p. Locomotives|
g. Toys and novelties| q. Office machines equipment|
h. Coke| r. Luggage|
i.Cooking utensils| s. Paint|
j. Caskets| t. Tires and tubes|
Solution:
* Job order cost procedure:(e), (f), (g), (i), (j), (k), (p), (q), (r) * Process costing procedure:(a), (b), (c), (d), (h), (l), (m), (n), (o), (s), (t) Exercise 2--Job order cost sheet:
Forge Machine Works collects its cost data by the job order cost accumulation procedure. For Job 642, the following data are available: Direct Materials| Direct Labor|
9/14 Issued| $ 1,200| Week of Sep. 20| 180 hrs @ $6.20/hr| 9/20 Issued| 662| Week of Sep. 26| 140 hrs @ $7.30/hr|
9/22 Issued| 480|  |  |
Factory overhead applied at the rate of $3.50 per direct labor hour.Required: 1. The appropriate information on ajob cost sheet. 2. The sales price of the job, assuming that it was contracted with a markup of 40% of cost.| Solution:

1.
Forge Machine Works
Job Order Cost Sheet--Job 642|
Direct materials| Direct labor| Applied factory overhead| Date Issued| Amount| Date (Week of)| Hours| Rate| Cost| Date (Week of)| Hours| Rate| Cost| 9/14| $1,200| 9/20| 180| $6.20| $1,116| 9/20| 180| $3.50| $630| 9/20| 662| 9/26| 140| 7.30| 1,022| 9/26| 140| 3.50| 490| 9/22| 480|  |  |  |  |  |  |  |  |

 | --------|  |  |  | ----------|  |  |  | ----------|  | $2,342
=====|  |  |  | $2,138
======|  |  |  | $1,120
======|
2.
Sales Price of job 642, contracted with a markup of 40% of cost: Direct materials| $2,342|
Direct labor| 2,138|
Applied factory overhead| 1,120|
 |  |
Total factory cost| $5,600|
Markup 40% of cost| 2,240|
 | -------|
 | $7,840
=====|
Exercise 3--Job order costing:
The Cambridge Company usesjob order costing. At the beginning of the May, two jobs were in process:  |  | Job 369| Job372|
| Materials| $ 2,000| $ 700|
 | Direct labor| 1,000| 300|
 | Applied factory overhead| 1,500| 450|
There was no inventory of finished goods on May1. During the month, Jobs 373, 374, 375, 376, 378, and 379 were started.Materials requisitions for May totaled $13,000, direct labor cost, $10,000, and actual factory overhead, $16,000. Factory overhead is applied at a rate of 150% of direct labor cost. The only job still in process at the end of May is No. 379, with costs of $1,400 for materials and $900 for direct labor. Job 376, the only finished job on hand at the end of May, has a total cost of $2,000.Required: 1. T accounts for work in process, finished goods, cost of goods sold, factory overhead control, and applied factory overhead. 2. General journal entries to record: a. Cost of goods manufactured

b. Cost of goods sold
c. Closing of over or underapplied factory overhead to cost of goods sold.| Solution:
T Accounts
Work in Process|
May1 Balance
No. 369            4,500
No. 372            1,450Materials        13,000Direct labor     10,000Factory O/H     15,000                         43,950May31 Balance: No. 379           3,650*| Finished 
goods            40,300|
*$1,400 + $900 + ($900 × 150%) Factory Overhead Control|
                      16,000|                        15,000                        1,000                         16,000|
|  | Finished Goods|
From 
Work in Process      40,300May31 Balance:
No.376                     2,000| Cost of goods sod   38,300|   Cost of Goods sold|
From finished
goods                   38,300Underapplied Overhead               1,000
                               39,300|...
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