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# Job Costs in a Service Company

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Job Costs in a Service Company
On June 1, two jobs were in process at Top Notch Painters, Inc. Details of the jobs follow:
Job No. Direct Material Direct Labor
P-20 \$174 \$64
P-43 32 84

Material inventory (for example, paint and sandpaper) on June 1 totaled \$920, and \$116 in material was purchased during the month. Indirect material of \$16 was withdrawn from material inventory. On June 1, finished-goods inventory consisted of two jobs: P-12, costing \$392, and P-26, costing \$158. Both jobs were transferred to Cost of Goods Sold during the month.

Also during June, jobs P-20 and P-43 were completed. To complete job P-20 required an additional \$68 in direct labor. The completion costs for job P-43 included \$108 in direct material and \$200 in direct labor. Job P-45 was started during the period but was not finished. A total of \$314 of direct material was used (excluding the \$16 indirect material) during the period, and total direct-labor costs during the month amounted to \$408. Manufacturing overhead has been estimated at 150 percent of direct-labor costs, and this relationship has been the same for the past few years.

Required
Compute the costs of jobs P-20 and P-43 and the balances in the June 30 inventory accounts.
Job costs are collected in the three types of inventory accounts: material, work-in-process, and finished goods inventory.Compute the balance in each of the three accounts for Jobs P-20 and P-43. Compute the 6/1 balance in each account, post June events, and calculate the 6/30 ending balances.

#### Solution Preview

Job Costs in a Service Company
On June 1, two jobs were in process at Top Notch Painters, Inc. Details of the jobs follow:
Job No. Direct Material Direct Labor
P-20 \$174 \$64
P-43 32 84

Material inventory (for example, paint and sandpaper) on June 1 totaled \$920, and \$116 in material was purchased during the month. Indirect material of \$16 was withdrawn from material inventory. On June 1, finished-goods inventory consisted of two jobs: P-12, costing \$392, and P-26, costing \$158. Both jobs were transferred to Cost of Goods Sold during the month.

Also during June, jobs P-20 and P-43 were completed. To complete ...

#### Solution Summary

This solution is comprised of a detailed explanation to compute the costs of jobs P-20 and P-43 and the balances in the June 30 inventory accounts, compute the balance in each of the three accounts for Jobs P-20 and P-43, and compute the 6/1 balance in each account, post June events, and calculate the 6/30 ending balances. This solution is provided in an attached Word document.

\$2.49