Session 05 Solutions

Session 05 Solutions - Example: A firm started two Jobs, A...

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Example : A firm started two Jobs, A and B, during the period. The following direct costs were incurred for each: 1.0 9.5 1 9 Machine hours – Job A – Job B $1,200 10.5 $1,000 10 Total Overhead incurred Allocation Base (Machine hours) Actual Budgeted $500 $600 Direct Labor $300 $500 Direct Materials Job B Job A The firm uses a normal costing system with one cost pool to account for all overhead costs. Overhead costs are applied using machine hours as the base. At the end of the period, Job A was completed and delivered to the customer, Job B, remained in-process to be completed in the following period. Give the summary journal entries to account for the firm’s operations for the period.
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To record the actual costs: To record direct materials costs: 800 Raw Materials Inventory 500 300 Work-in-Process – Job A Work-in-Process – Job B To record direct labor costs: 1,100 Wages Payable 600 500 Work-in-Process – Job A Work-in-Process – Job B To record actual overhead costs: 1,200
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Session 05 Solutions - Example: A firm started two Jobs, A...

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