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Chapter 17: 17-1SE-f (page 938)
Distinguishing between job order costing and process costing
Would the following companies most likely use job order costing or process costing?
f. A custom home builder
A custom home builder is most likely to use a job-order costing system.
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The manufacturing records for Sporty Kayaks at the end of the 2018 fiscal year show the following information about manufacturing overhead:
Overhead allocated to production | \(409,200 |
Actual manufacturing overhead cost | 432,000 |
Predetermined overhead allocation rate | \)44 per machine hours |
Requirements
3. Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead.
Selected cost data for Classic Print Co. are as follows:
Estimated manufacturing overhead cost for the year | $125,000 |
Estimated direct labor cost for the year | 78,125 |
Actual manufacturing overhead cost for the year | 116,000 |
Actual direct labor cost for the year | 67,000 |
Requirements
4. Prepare the journal entry to adjust for the under allocated or overallocated manufacturing overhead.
Jordan Company has the following information for the year ended December 31, 2018. Use the information to prepare a schedule of cost of goods manufactured and an income statement. Assume no indirect materials are used and all amounts are shown in millions.
Inventory balances: | Beginning | Ending |
Work-in-process | \(5 | \)16 |
Finished goods | 12 | 15 |
Other information: | |
Sales revenue | $253 |
Selling and administrative expenses | 85 |
Direct labor | 62 |
Manufacturing overhead; actual and allocated | 20 |
Direct materials used | 31 |
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.
Question: Explain the difference between cost of goods manufactured and cost of goods sold.
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