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Chapter 17: 17-1SE-a (page 938)
Distinguishing between job order costing and process costing
Would the following companies most likely use job order costing or process costing?
a. A manufacturer of refrigerators
A manufacturer of the refrigerator is most likely to use process costing.
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Question: Using job order costing in a service company
Assume that Roth’s accountants are expected to work a total of 8,000 direct labor hours in 2018. Roth’s estimated total indirect costs are $96,000 and the allocation base used is direct labor hours.
Requirements
2. What indirect costs will be allocated to Client 507 if Jack Smith, an accountant at Roth Accounting, works 15 hours to prepare the financial statements?
Journalize the following labor-related transactions for Portland Glass Creations at its plant in Portland, Oregon. Assume that the labor has been incurred, but not yet paid.
Oak Outdoor Furniture manufactures wood patio furniture. If the company reportsthe following costs for June 2018, what is the balance in the Manufacturing Overheadaccount before overhead is allocated to jobs? Assume that the labor has been incurred,but not yet paid. Prepare journal entries for overhead costs incurred in June.
Wood | $270,000 |
Nails, glue, stain | 18,000 |
Depreciation on saws | 5,300 |
Indirect manufacturing labor | 45,000 |
Depreciation on delivery truck | 1,700 |
Assembly-line worker’s wages | 51,000 |
Question: A job was started on May 15, completed on June 27, and delivered to the customer on July 6. In which accounts would the costs be recorded on the financial statements dated May 31, June 30, and July 31?
June production generated the following activity in Bentley Chassis Company’s Work-in-Process Inventory account:
June 1 balance | \(36,000 |
Direct materials used | 32,000 |
Direct labor assigned to jobs | 40,000 |
Manufacturing overhead allocated to jobs | 28,000 |
Additionally, Bentley Chassis has completed Jobs 142 and 143, with total costs of
\)37,000 and \(48,000, respectively.
Requirements
3. Prepare the journal entry to record the sale on account of Job 143 for \)63,000.
Also, prepare the journal entry to record Cost of Goods Sold for Job 143.
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