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Job Costing Journal Entries and Concepts

Question 23
Olson Corporation constructs new homes. Assume that Olson uses a job costing system. During May 2010, the following transactions occurred:

Olson purchased $4,500 of lumber on account.
Olson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour.
Depreciation of $1,500 on equipment used to build new houses was recorded.
A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash.

The journal entry to record the requisition of lumber for Olson would include a
debit to Work-in-Process of $4,500.
debit to Materials Inventory of $3,750.
credit to Finished Goods of $3,750.
debit to Work-in-Process of $3,750.

Question 36
The Kraig Corporation manufactures custom-made purses. The following data pertains to Job XY5:

Direct materials placed into production $4,000
Direct labor hours worked 50 hours
Direct labor rate per hour $ 15
Machine hours worked 100 hours

Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $60,000 for the year and the direct labor hours were estimated to be 15,000. Job XY5 consists of 50 units.

What the total cost assigned to Job XY5?
a- $5,150
b- $4,400
c- $4,200
d- $4,950

Solution Preview

Question 23: When the lumber was bought, Olson debited Materials Inventory for $4,500 and credited accounts payable for the same amount. When it transferred the $3,750 to the job, it debited Work-In-Process for $3,750 and credited Materials ...

Solution Summary

Olson Corporation constructs new homes. Assume that Olson uses a job costing system. During May 2010, the following transactions occurred:

Olson purchased $4,500 of lumber on account.
Olson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour.
Depreciation of $1,500 on equipment used to build new houses was recorded.
A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash.

The journal entry to record the requisition of lumber for Olson would include a
debit to Work-in-Process of $4,500.
debit to Materials Inventory of $3,750.
credit to Finished Goods of $3,750.
debit to Work-in-Process of $3,750.

The Kraig Corporation manufactures custom-made purses. The following data pertains to Job XY5:

Direct materials placed into production $4,000
Direct labor hours worked 50 hours
Direct labor rate per hour $ 15
Machine hours worked 100 hours

Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $60,000 for the year and the direct labor hours were estimated to be 15,000. Job XY5 consists of 50 units.

What the total cost assigned to Job XY5?
a- $5,150
b- $4,400
c- $4,200
d- $4,950

$2.19