Qs 2 12 job order production c1 refer to this

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Survey of Accounting
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Chapter 10 / Exercise E10-13
Survey of Accounting
Warren
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QS 2-12 Refer to this chapter’s Global View. Porsche AG is the manufacturer of the Porsche automobile line. Does Porsche produce in jobs or in job lots? Explain.
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Survey of Accounting
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Chapter 10 / Exercise E10-13
Survey of Accounting
Warren
Expert Verified
Chapter 2 Job Order Costing and Analysis 69 Exercise 2-4 Analysis of cost flows C2 P1 P2 P3 As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs. Job 102 Job 103 Job 104 Direct materials . . . . . . . . . $30,000 $66,000 $54,000 Direct labor . . . . . . . . . . . . 16,000 28,400 42,000 Overhead . . . . . . . . . . . . . . 8,000 14,200 21,000 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $12,000; direct labor, $3,600; and overhead, $1,800. Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. No raw materials are used indirectly in June. Using this information, answer the following questions. (Assume this company’s predetermined overhead rate did not change across these months). 1. What is the cost of the raw materials requisitioned in June for each of the three jobs? 2. How much direct labor cost is incurred during June for each of the three jobs? 3. What predetermined overhead rate is used during June? 4. How much total cost is transferred to finished goods during June? Check (4) $162,600 JOB COST SHEET Customer’s Name Keiser Co. Job No. 13-56 Job Description 5 color monitors—21 inch Overhead Direct Materials Direct Labor Costs Applied Date Requisition No. Amount Time-Ticket No. Amount Rate Mar. 8 4-129 $5,000 T-306 $ 640 Mar. 11 4-142 7,050 T-432 1,280 Mar. 18 4-167 3,550 T-456 1,280 Totals Exercise 2-5 Overhead rate; costs assigned to jobs P3 In December 2010, Kent Computer’s management establishes the year 2011 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $756,000 of overhead costs and $540,000 of direct labor cost in year 2011. During March 2011, Kent began and completed Job No. 13-56. 1. What is the predetermined overhead rate for year 2011? 2. Use the information on the following job cost sheet to determine the total cost of the job. Check (2) $23,280 Lopez Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year-end, the Goods in Process Inventory account shows the following. Amount Exercise 2-6 Analysis of costs assigned to goods in process P3 Explanation Date Debit Credit Balance 2011 Dec. 31 31 31 31 Direct materials cost Direct labor cost Overhead costs To finished goods 1,500,000 1,740,000 2,190,000 90,000 1,500,000 240,000 450,000 2,100,000 Accounting System Goods in Process Inventory Acct. No. 121 File Edit Maintain Tasks Analysis Options Reports Window Help 1. Determine the overhead rate used (based on direct material cost). 2. Only one job remained in the goods in process inventory at December 31, 2011. Its direct materials cost is $30,000. How much direct labor cost and overhead cost are assigned to it? Check (2) Direct labor cost, $51,000
70 Chapter 2 Job Order Costing and Analysis Exercise 2-7 Cost flows in a job order cost system P1 P2 P3 P4

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