REQUESTED: 1. Mention and briefly describe the type of Cost Accumulation System that you know! Mention the characteristics of companies that use Job Order Costing! 2. Make the journal required for the above transactions!
JOB ORDER COSTING
Whiscats Corporation plans to sell 14,000 boxes of cat food each period. For the coming period, management plans to have 3,000 boxes for finished goods ending inventory and 5,000 boxes as initial finished goods inventory. The fixed overhead budget for each period is $ 82,000, while variable overhead costs are set at $ 1.5 per box (FOH rate determination is based on 50,000 direct hours of work).
a. Transactions that occur are Purchases of direct materials on account of $ 35,000 and indirect materials of $ 8,000.
b.Requests for raw materials and direct labor used:
|
Job No. |
Materials |
Labor Cost |
Direct Labor Hours |
|
102 |
21,800 |
21,600 |
5,500 |
|
105 |
17,600 |
61,700 |
15,000 |
|
108 |
31,900 |
85,750 |
10,500 |
|
General Factory Used |
5,000 |
10,200 |
- |
c.Factory insurance expense due until the end of the period $ 7,000
d. Factory utility expense payable up to the end of the period $ 18,000
e.
f. Completed Jobs are Job 102 and 108; while jab 105 has only been completed 80%. The overhead charged is applied to the work in process of each job.
g. The finished job is transferred to the finished goods warehouse
h. Job No. 102 and 108 are sent to the customer and billed in the first month of the future period. The selling price is set at a markup of 40% of the cost.
i. Cover over or underapplied FOH to COGS
REQUESTED:
1. Mention and briefly describe the type of Cost Accumulation System that you know! Mention the characteristics of companies that use Job Order Costing!
2. Make the journal required for the above transactions!
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