Problem: JOB COSTING
Gamma Company employs a job-order costing system.
For the year ended Dec. 31,
2013, the company’s records showed inventory balances as follows:
Work in process
During the year, the following transactions were completed:
Raw materials acquired from suppliers on account, $400,000
Raw materials requisitioned for use in production, $360,000 ($200,000
for Job A, $100,000 for Job B and $60,000 indirect).
Costs for employee services were incurred as follows:
Direct labor costs …. $ 90,000 (50,000 for Job A; $40,000 Job B)
Indirect labor costs .
. $ 85,000
Depreciation was recorded on equipment, of which $40,000 related to
equipment used in the factory and $30,000 related to equipment used
in selling and administrative activities.
Advertising expense accrued, $220,000.