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Job Order - Journal Entries

Lecture

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Wael chehata
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23 views4 pages

Job Order - Journal Entries

Lecture

Uploaded by

Wael chehata
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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e.g. 1 During Feb.

, Cardella manufacturing work on 2 jobs A16, B27,


summary data concerning these jobs are as follows:

Manufacturing costs incurred:

1. Purchased $54,000 of raw materials on account.


2. DM : Job A16 $27,000 and Job17 $21,000
IDM $3,000
3. DL : Job A16 $52,000 and Job 17 $26,000
IDL: $2,000
4. MOH other than IDM and IDL $59,800
Including $10,000 factory equipment-depreciation expense
Insurance expense 15,000 and other miscellaneous MOH occurred
on account.
5. MOH rate 80% of DL costs
6. Job A16 was completed and sold on account for $150,000. Job B17
was only partially completed

Required:

a) Journalize the transactions


b) What was the amount of over-applied or under-applied MOH
a)

Date Acc. Title and explanation Dr. Cr.


1 Raw materials 54,000
A/P 54,000
2 WIP 48,000
MOH 3,000
Raw Materials 51,000
3 WIP 78,000
MOH 2,000
Salaries and wages payable 80,000
4 MOH 59,800
Acc. Depreciation 10,000
Prepaid insurance 15,000
A/P 34,800
5 WIP 62,400
MOH 62,400
(80% X 78,000)
6 FG 120,600
WIP 120,600
[27,000 + 52,000 + (80% X 52,000)]
7 A/R 150,000
Sales 150,000

COGS 120,600
FG 120.600
X Company is a manufacturing firm that uses job order costing
system.
The company applies overhead costs to jobs on the basis of
machine-hours worked. For the current year, the company
estimated that it would work 75,000 machine hours and total
estimated MOH cost is $450,000.
The following transactions occurred during the year:
1. Raw materials were purchased on account $410,000.
2. Raw materials used in production $380,000 ($360,000 DM
and $20,000 IDM)
3. The following costs were incurred: DL $75,000; IDL
$110,000, Sales commission $90,000; and administrative
salaries $20,000 on account.
4. Sales travel costs were $17,000 on account.
5. Utility costs in the factory were $43,000 on account.
6. Advertising costs were $180,000 on account.
7. Depreciation was recorded for the year $350,000 (80%
relates to factory and 20% relates to selling and
administrative expenses)
8. Insurance expired during the year $10,000 (70% relates to
factory operations and 30% relates to selling and
administrative activities)
9. MOH was applied to production. The company worked
80,000 machine hours during the year.
10 . Goods costing $900,000 according to their job cost sheet
were completed during the year.
11. Sold goods on account $1,500,000 and their cost
$870,000

Prepare the journal entries


Ayres Inc. is a manufacturing firm that uses Job order
costing. On Jan 2016, the company received 2 job orders
(A and B). The company applies cost to jobs on the basis
of direct labor hours to jobs on the basis of direct labor
hours and the company estimated its manufacturing
overhead as $300,000 and its direct labor as 60,000 hours

1. Raw materials were purchased for 80,000 on account.


2. Labor cost $90,000 ($75,000 DL), ($50,000 for job A
and $25,000 for job B)
3. Materials issued for production = $700,000
($600,000 DM). ($400,000 for job A and $200,000 for
job B)
4. Depreciation on factory equipment $39,000
5. Maintenance materials issued for factory equipment
$30,000
6. Salary of factory supervisor $16,000
7. Utility cost incurred in the factory $35,000
8. MOH was applied to production and the actual direct
labor hours = 45,000, (30,000 hours for job A and
15,000 hours for job B).
9. Job B was completed during the year and its total cost
was indicated in the job cost sheet. While job A is under
process.
10. The total units of job B were sold at a selling price
$410,000
Required:
a) Prepare the job cost sheet for job A and B.
b) Prepare the journal entries
c) Compute the under-applied or over-applied
manufacturing overhead

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