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# Job Costing and Process Costing

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PROBLEM 1
Analyze job cost sheet and prepare entry for completed job.
A job cost sheet of Battle Company is given below.
1. What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?
2. What is the predetermined manufacturing overhead rate?
3 What are the total cost and the unit cost of the completed job?
b. Prepare the entry to record the completion of the job.

Battle Company

Job Cost Sheet
Job No. 469 Quantity 2000

Item White Lion Cages Date Requested 7/2
For Tesla Company Date Completed 7/31

Date Direct Materials Direct Labor Manufacturing Overhead

7/10 828
7/12 900
7/15 440 528
7/22 380 456
7/24 1600
7/27 1500
7/31 540 648
Cost of completed job:
Direct Materials
Direct Labor
Total Cost
Unit Cost

(a) 1. The source documents are:

2. The predetermined overhead rate is xxx% of direct labor cost. For example, on July 15, the computation is \$xxx ÷ \$xxx = 120%. The same result is obtained on July 22 and 31.

3. The total cost is:
Direct materials \$4828
Direct labor 1360&#8194;
\$7,820
The unit cost is \$3.91 (\$7,820 ÷ 2,000).

(b) July 31 Finished Goods Inventory 7520
Work in Process Inventory 7520

PROBLEM 2
The Sanding Department of Han Furniture Company has the following production and manufacturing cost data for April 2005.
? Production: 12,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 40% complete as to conversion costs.
? Manufacturing costs: Materials \$36,000; labor \$30,000; overhead \$37,320.
Instructions
Prepare a production cost report. There is no beginning work in process.

HAN FURNITURE COMPANY
Sanding Department
Production Cost Report
For the Month Ended April 30, 2005

Equivalent Units

Quantities Physical
Units
Materials Conversion
Costs

Units to be accounted for
Work in process, April 1
Started into production
Total units

Units accounted for
Transferred out
&#8194;&#8194; &#8194;&#8194;0
xxx
xxx
xxx
xxx
Xxx

Work in process, April 30 &#8194;xxx &#8194;xxx &#8194;&#8194; xxx (3,000 X 40%)
Total units 15.000 15,000 13,200

Costs
Materials Conversion
Costs
Total

Unit costs
Costs in April
Equivalent units
Unit costs (a) ÷ (b)

Costs to be accounted for
Work in process, March
Started into production
Total costs
\$xxx
&#8194;xxx
&#8194;&#8194;\$2.40
\$xxx
&#8194;xxx
&#8194;&#8194;\$5.10
\$xxx

&#8194;&#8194;\$7.50

\$&#8194;&#8194; &#8194;&#8194;0
&#8194;xxx
\$103,320

Cost Reconciliation Schedule

Costs accounted for
Transferred out (12,000 X \$7.50)
Work in process
Materials (3,000 X \$2.40)
Conversion costs (1200 X \$5.10)
Total costs

&#8194;\$xxx
&#8194;&#8194;xxx
\$xxx

&#8194;xxx
\$103,320

#### Solution Preview

PROBLEM 1
Analyze job cost sheet and prepare entry for completed job.
A job cost sheet of Battle Company is given below.
1. What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?
2. What is the predetermined manufacturing overhead rate?
3 What are the total cost and the unit cost of the completed job?
b. Prepare the entry to record the completion of the job.

Battle Company

Job Cost Sheet
Job No. 469 Quantity 2000

Item White Lion Cages Date Requested 7/2
For Tesla Company Date Completed 7/31

Date Direct Materials Direct Labor Manufacturing Overhead

7/10 828
7/12 900
7/15 440 528
7/22 380 456
7/24 1600
7/27 1500
7/31 540 648
Cost of ...

#### Solution Summary

The solution has two problems relating to job costing and process costing.

\$2.19