Concept explainers
Show Flow of Costs to Jobs
Kim’s Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $36,000. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs:
Overhead has been applied at 30 percent of the costs of direct labor.
During May, Kim’s Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow:
Other May Events
- 1. Received $12,500 payment on Job 24 delivered to customer in April.
- 2. Purchased materials and equipment for $9,400.
- 3. Billed Pine Ridge Estates $130,000 and received payment for $75,000 of that amount.
- 4. Determined that payroll for indirect labor personnel totaled $650.
- 5. Issued supplies and incidental materials for current
jobs costing $155. - 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment
depreciation ):
Required
- a. Prepare
journal entries to record the flow of costs for operations during May. - b. Calculate the amount of over- or underapplied overhead for the month. This amount is debited or credited to Cost of Goods Sold.
- c. Determine inventory balances for Materials and Equipment Inventory and Work-in-Process Inventory.
Want to see the full answer?
Check out a sample textbook solutionChapter 7 Solutions
FUND.COST ACCOUNTING W/ CONNECT>LLF<>IB
- Sultan, Inc. manufactures goods to special order and uses a job order cost system. During its first month of operations, the following selected transactions took place: Required: 1. Prepare a schedule reflecting the cost of each of the four jobs. 2. Prepare journal entries to record the transactions. 3. Compute the ending balance in Work in Process. 4. Compute the ending balance in Finished Goods.arrow_forwardClemens Cars' job cost sheet for Job A40 shows that the cost to add security features to a car was $15,500. The car was delivered to the customer, who paid $20,200 in cash for the added features. What journal entries should Clemens record for the completion and delivery of Job A40? View transaction list Journal entry worksheet < 1 2 3 Record transfer of cost of completed job to Finished Goods. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journalarrow_forwardAuto Safe's job cost sheet for Job A40 shows that the total cost to add security features to a car was $11,500. The car was delivered to the customer, who paid $16,200 cash for this job. Prepare the journal entries for Job A40 to record (a) its completion and (b) its sale. View transaction list Journal entry worksheet < 1 2 Record transfer of cost of completed job to Finished Goods. Transaction 3 Note: Enter debits before credits. Record entry General Journal Clear entry Debit Credit View general journalarrow_forward
- View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. In January, Oriole Tool & Die requisitions raw materials for production as follows: Job 1 $970, Job 2 $1,700, Job 3 $730, and general factory use $620. Prepare a summary journal entry to record raw materials used. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Jan. 31 Account Titles and Explanation Work in Process Inventory Manufacturing Overhead Raw Materials Inventory Debit $3,040 $630 Creditarrow_forwardAuto Safe's job cost sheet for Job A40 shows that the total cost to add security features to a car was $15,000. The car was delivered to the customer, who paid $19,700 cash for this job. Prepare the journal entries for Job A40 to record (a) its completion and (b) its sale. View transaction list Journal entry worksheet 1 2 Record transfer of cost of completed job to Finished Goods. Transaction a 3 Note: Enter debits before credits. General Journal Debit Creditarrow_forwardPlease answer the following subparts in regards to this same question: d. Direct labor usede. Indirect labor usedf. Other overhead costs paid in cash Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the cutting process. The following information is available regarding its May inventories. Beginning Inventory Ending Inventory Raw materials inventory $ 81,000 $ 97,900 Work in process inventory—Cutting 193,500 135,500 Work in process inventory—Stitching 213,300 107,000 Finished goods inventory 50,100 38,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit $ 100,000 Direct materials used—Cutting 25,500 Direct materials used—Stitching 0 Direct labor Direct labor—Cutting $ 23,100 Direct labor—Stitching 92,400 Factory Overhead (Actual costs)…arrow_forward
- Current Attempt in Progress Your answer is partially correct. In January, Sunland Tool & Die requisitions raw materials for production as follows: Job 1 $930, Job 2 $1,200, Job 3 $720, and general factory use $610. Prepare a summary journal entry to record raw materials used. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.)arrow_forwardRequired information [The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 50,000 Work in process $49,000 9,600 64,000 18,300 Finished goods 34,800 Activities and information for May Raw materials purchases (paid with cash) 173,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 11,000 Indirect labor 46,000 Other overhead costs 105,000 Sales (received in cash) Predetermined overhead rate based on direct labor cost 1,700,000 55% 1. Incurred other overhead costs (record credit to Other Accounts). 2. Applied overhead to work in process. Prepare journal entries for the above transactions for the month of May. *********** *********** OI of 7 H ……. ‒‒‒ Garrow_forwardRequired information [The following information applies to the questions displayed below] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials Work in process $29,000 9,600 51,000 Finished goods Activities and information for May Raw materials purchases (paid with cash). Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost 1. Direct labor usage. 2. Indirect labor usage. 3. Total payroll paid in cash. Prepare journal entries for the above transactions for the month of May. 38,000 20,700 35,000 180,000 150,000 15,000 34,500 109,000 1,600,000 55% $arrow_forward
- Required information [The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 29,000 Work in process Finished goods 9,600 51,000 Activities and information for May Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost 1. Raw materials purchases for cash. 2. Direct materials usage. 3. Indirect materials usage. Prepare journal entries for the above transactions for the month of May. View transaction list View journal entry worksheet No Transaction General Journal A 1 Raw materials inventory Cash $ 38,000 20,700 35,000 180,000 150,000 15,000 34,500 109,000 1,600,000 55% Debit 180,000 Credit 180,000arrow_forwardWhat types of expenses are likely included in the total manufacturing overhead cost of $32,450 incurred for the first three months of operation? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Selling expenseunchecked Administrative expenseunchecked Ending work in process inventoryunchecked Rent for the production facilityunchecked Depreciation on the production equipmentchecked Insurance on the production equipmentchecked Indirect materials used in producing recordschecked Indirect labour related to the CEO's supervision of the production process (20% of her time).arrow_forwardRequired information [The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 48,000 $ 45,000 Work in process 9,600 18,600 Finished goods 60,000 34,500 Activities and information for May Raw materials purchases (paid with cash) 185,000 Factory payroll (paid with cash) 250,000 Factory overhead Indirect materials 16,000 Indirect labor 57,500 Other overhead costs 113,000 Sales (received in cash) 1,200,000 Predetermined overhead rate based on direct labor cost 55 % Raw materials purchases for cash. Direct materials usage. Indirect materials usage. Prepare journal entries for the above…arrow_forward
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning