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    Job order costing

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    2-9. Recording Labor Cost in Job-Order Costing

    Johnson Products had the following labor time tickets for the month of February:
    Required
    a. Calculate the amount of direct labor cost assigned to each job.
    b. Summarize the labor time tickets and prepare a journal entry to record direct labor
    for the month:

    2-12. Allocating Manufacturing Overhead to Jobs

    Webber Fabricating estimated the following annual costs:
    Expected annual direct labor hours 40,000
    Expected annual direct labor cost $600,000
    Expected machine hours 15,000
    Expected material cost for the year $800,000
    Expected manufactwing overhead $900,000

    Required
    a. Calculate overhead allocation rates using each of the four possible allocation bases
    provided.

    b. Determine the cost of the following job (number 253) using each of the four overhead
    allocation rates.

    Job 253
    Direct materials $2,500
    Direct labor (140 hrs @l1/hr) $1,540
    Machine hours used 100
    2-1. Cost of Goods Manufactured, Cost of Goods Sold, and Income

    The following information is available for Satterfield's Custom Glass for the fiscal year
    ending December 31, 2008.

    Beginning balance in Work in Process $200,000
    Ending balance in Work in Process 275,000
    Beginning balance in Finished Goods 450,000
    Ending balance in Finished Goods 300,000
    Direct material cost 2,000,000
    Direct labor cost 2,500,000
    Manufacturing overhead 1,500,000
    Selling expenses 200,000
    General and administrative expenses 400,000
    Sales 8,000,000

    Required
    a. Prepare a schedule of cost of goods manufactured.

    b. Prepare an income statement for fiscal 2008. Ignore income taxes.
    2-6. Job Costs Using Different Overhead Rates

    Vintage Auto Company manufactures parts-to-order for antique cars. Vintage Auto makes
    everything from fenders to engine blocks. Each customer order is treated as a job. They currently
    have two jobs, No. 9823 and No. 9824, that are complete, although overhead has not
    yet been applied. The company wants to know what each job's cost would be under alternative
    overhead allocation rates based on: (1) direct labor cost, (2) direct labor
    hours, and (3) machine hours. Estimates for this year are as follows:

    Direct labor cost $240,000
    Direct labor hours 20,000
    Machine hours 6,000
    Overhead costs $136,000

    Depreciation on machinery accounts for 75 percent of the overhead costs. The job-cost
    sheets show the following:
    Job 9823 Job 9824
    Direct material $855 $1,650
    Direct labor cost $1,020 $1,020
    Direct labor hours 85 68
    Machine hours 100 200

    Required
    a. Determine the overhead allocation rate under the three suggested allocation
    bases. Round to two decimal places.

    b. Calculate the cost of Job 9823 and Job 9824 using each of the three bases. Round to
    two decimal places.

    c. Discuss which allocation base appears preferable.

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