AC 212 Lecture Notes - Lecture 3: Direct Labor Cost, Production Schedule, Finished Good

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peachjellyfish757

4 Jan 2018

School

Quinnipiac University

Department

Accounting

Course

AC 212

Professor

Katherine Simione

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Document Summary

Harp music corporation manufactures violins, cellos, and fiddles and uses a job-order costing system. What type of account should harp credit when goods are sold: finished goods inventory. What account should harp debit when the production manager has earned her salary: manufacturing overhead. The manufacturing cost information on a job cost record includes each of the following: direct materials, manufacturing overhead, direct labor. Which of the following entries represents the correct entry to assign direct labor to a job: a debt to work in progress inventory and credit to wages payable. Athens machining had one job in work in process inventory at the beginning of the month: The costs incurred to date on the job included . 00 per direct labor hour. The total direct labor hours were 160 direct labor hours. How much manufacturing overhead (moh) should the manager allocate to job 1376: moh allocated= price per direct labor * direct labor hours, . 00 * 160= .

Related Questions

Garcia Manufacturing uses a job order cost system and appliesoverhead to production on the basis of direct labor costs. OnJanuary 1, 2010, Job No. 50 was the only job in process. The costsincurred prior to January 1 on this job were as follows: directmaterials $20,000, direct labor $12,000, and manufacturing overhead$16,000. As of January 1, Job No. 49 had been completed at a costof $90,000 and was part of finished goods inventory. There was a$15,000 balance in the Raw Materials Inventory account.
During the month of January, Garcia Manufacturing began productionon Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50were also sold on account during the month for $122,000 and$158,000, respectively. The following additional events occurredduring the month.

1. Purchased additional raw materials of $90,000 on account.
2. Incurred factory labor costs of $65,000. Of this amount $16,000related to employer payroll taxes.
3. Incurred manufacturing overhead costs as follows: indirectmaterials $17,000; indirect labor $15,000; depreciation expense$19,000, and various other manufacturing overhead costs on account$20,000.
4. Assigned direct materials and direct labor to jobs asfollows.

Job No. Direct Materials Direct Labor
50 $10,000 $ 5,000
51 39,000 25,000
52 30,000 20,000
Prepare the journal entries to record the assignment of directmaterials, direct labor, and manufacturing overhead costs toproduction. In assigning manufacturing overhead costs, use theoverhead rate calculated in first part of question.

Account/Description Debit Credit
Work in process inventory 79,000
Raw materials inventory 79,000
(To assign direct materials to production.)
Work in process inventory 50,000
Factory labor 50,000
(To assign labor to production.)
Work in process inventory ???
Manufacturing overhead ???
(To assign manufacturing overhead to production.)

harlequinmanatee816

Pedriani Company uses a job order cost system and applies overhead to production on the basis of direct labor hours. On January 1, 2017, Job No. 25 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $10,000; direct labor $6,000; and manufacturing overhead $9,000. Job No. 23 had been completed at a cost of $42,000 and was part of finished goods inventory. There was a $5,000 balance in the Raw Materials Inventory account.

During the month of January, the company began production on Jobs 26 and 27, and completed Jobs 25 and 26. Jobs 23 and 25 were sold on account during the month for $63,000 and $74,000, respectively. The following additional events occurred during the month.

1. Purchased additional raw materials of $45,000 on account.

2. Incurred factory labor costs of $33,500. Of this amount, $7,500 related to employer

payroll taxes.

3. Incurred manufacturing overhead costs as follows: indirect materials $10,000;

indirect labor $9,500; depreciation expense on equipment $12,000; and various

other manufacturing overhead costs on account $11,000.

4. Assigned direct materials and direct labor to jobs as follows.

Job No.	Direct Materials	Direct Labor
25	$ 5,000	$ 3,000
26	17,000	12,000
27	13,000	9,000

5. The company uses direct labor hours as the activity base to assign overhead. Direct labor hours incurred on each job were as follows: Job No. 25, 200; Job No. 26, 800; and Job No. 27, 600.

Instructions

(a) Calculate the predetermined overhead rate for the year 2017, assuming Pedriani Company estimates total manufacturing overhead costs of $440,000, direct labor costs of $300,000, and direct labor hours of 20,000 for the year.

(b) Open job cost sheets for Jobs 25, 26, and 27. Enter the January 1 balances on the job cost sheet for Job No. 25.

(c) Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.

(d) Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.

(e) Job 25, $37,400

Job 26, $46,600

(e) Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month.

(f) Prepare the journal entry (or entries) to record the sale of any job(s) during the month.

(g) What is the balance in the Work in Process Inventory account at the end of the month? What does this balance consist of?

(h) What is the amount of over- or underapplied overhead?

byzantiummanatee604

Lott Company uses a job order cost system and applies overheadto production on the basis of direct labor costs. On January 1,2017, Job No. 50 was the only job in process. The costs incurredprior to January 1 on this job were as follows: direct materials $22,400 , direct labor $ 13,440 , and manufacturing overhead $17,920 . As of January 1, Job No. 49 had been completed at a costof $ 100,800 and was part of finished goods inventory. There was a$ 16,800 balance in the Raw Materials Inventory account. During themonth of January, Lott Company began production on Jobs 51 and 52,and completed Jobs 50 and 51. Jobs 49 and 50 were also sold onaccount during the month for $ 136,640 and $ 176,960 ,respectively. The following additional events occurred during themonth. 1. Purchased additional raw materials of $ 100,800 onaccount. 2. Incurred factory labor costs of $ 78,400 . Of thisamount $ 17,920 related to employer payroll taxes. 3. Incurredmanufacturing overhead costs as follows: indirect materials $19,040 ; indirect labor $ 22,400 ; depreciation expense onequipment $ 13,440 ; and various other manufacturing overhead costson account $ 17,920 . 4. Assigned direct materials and direct laborto jobs as follows. Job No. Direct Materials Direct Labor 50 $11,200 $ 5,600 51 43,680 28,000 52 33,600 22,400 Calculate thepredetermined overhead rate for 2017, assuming Lott Companyestimates total manufacturing overhead costs of $940,800, directlabor costs of $784,000, and direct labor hours of 22,400 for theyear. (Round answer to the nearest whole percent, e.g. 25%.)Predetermined overhead rate % Open job cost sheets for Jobs 50, 51,and 52. Enter the January 1 balances on the job cost sheet for JobNo. 50. Job No. 50 Date Direct Materials Direct Labor ManufacturingOverhead Beg. $ $ $ Jan. $ $ $ Cost of completed job Directmaterials $ Direct labor Manufacturing overhead Total cost $ JobNo. 51 Date Direct Materials Direct Labor Manufacturing OverheadJan. $ $ $ $ $ $ Cost of completed job Direct materials $ Directlabor Manufacturing overhead Total cost $ Job No. 52 Date DirectMaterials Direct Labor Manufacturing Overhead Jan. $ $ $ Preparethe journal entries to record the purchase of raw materials, thefactory labor costs incurred, and the manufacturing overhead costsincurred during the month of January. (Credit account titles areautomatically indented when amount is entered. Do not indentmanually.) No. Account Titles and Explanation Debit Credit (1) (2)(3) Prepare the journal entries to record the assignment of directmaterials, direct labor, and manufacturing overhead costs toproduction. In assigning manufacturing overhead costs, use theoverhead rate calculated in (a). (Credit account titles areautomatically indented when amount is entered. Do not indentmanually.) No. Account Titles and Explanation Debit Credit (1) (2)(3) Total the job cost sheets for any job(s) completed during themonth. Prepare the journal entry to record the completion of anyjob(s) during the month. (Credit account titles are automaticallyindented when amount is entered. Do not indent manually.) AccountTitles and Explanation Debit Credit Prepare the journal entries torecord the sale of any job(s) during the month. (Credit accounttitles are automatically indented when amount is entered. Do notindent manually.) No. Account Titles and Explanation Debit Credit(1) (To record sale of jobs) (2) (To record cost of jobs) What isthe balance in the Finished Goods Inventory account at the end ofthe month? What does this balance consist of? Finished GoodsInventory $ What is the amount of over- or underapplied overhead?Manufacturing Overhead $ Question Attempts: 0 of 15 used Save forlater Submit Answer

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AC 212 Lecture Notes - Lecture 3: Direct Labor Cost, Production Schedule, Finished Good

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