For instance Jack will likely discover that actual overhead is more or less

For instance jack will likely discover that actual

This preview shows page 70 - 72 out of 130 pages.

For instance, Jack will likely discover that actual overhead is more or less than $150,000. Jack will also find that his electricians will probably work more or less than the anticipated 7,500 hours. When all is said and done, Jack will need to deal with the actual cost. The difference between the amount of overhead applied to production (i.e., direct labor hours X the $20 per hour rate) and the actual amount spent must be accounted for! We will see how to deal with this later in the chapter. 12.6 JOB COST SHEETS The preceding information can be logically transferred to a job cost sheet that is a compilation of cost data for a specific job: Castle Electric Job Cost Sheet Job: Job A - Image Advertising Form Reference Direct Labor Direct Material Applied Overhead Total Hours Rate Total Qty. Unit Cost Total Basis Qty. Rate Total July 14, 20X5 Donnie Odom DTS.07.14.X5.DO 1.00 $18 $18.00 $ 18.00 Light Bulb MR.07.14.X5.DO 1.00 $150 $150.00 150.00 Applied Overhead Labor Hours 1.00 $20 $20.00 20.00 1.00 $18.00 $150.00 $20.00 $188.00 The direct labor information found on the job cost sheet is taken from Donnie Odom’s daily time sheet (a cross-reference is created of “DTS.07.14.X5.DO” to indicate “daily time sheet of July 14, 20X5, for Donnie Odom”). In similar fashion, Donnie’s material requisition form was used as the source document for compiling the direct material information. Some type of cross-referencing system needs to be developed to allow one to trace specific cost allocations to their source documents. Overhead was applied directly to the job cost sheet based upon the predetermined overhead application scheme of $20 per direct labor hour. 12.7 EXPANDING THE ILLUSTRATION The next graphic shows separate job cost sheets for all three of Donnie’s jobs. All direct material and direct labor must be transferred to specific jobs. As alluded to earlier, the indirect labor (admin hours) and indirect material is not directly transferred to a specific job; its cost is instead represented through the applied overhead. Download free eBooks at bookboon.com
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MANAGERIAL AND COST ACCOUNTING BASIC JOB CASTING CONCEPTS 71 Castle Electric Job Cost Sheet Job: Job A - Image Advertising Form Reference Direct Labor Direct Material Applied Overhead Total Hours Rate Total Qty. Unit Cost Total Basis Qty. Rate Total July 14, 20X5 Donnie Odom DTS.07.14.X5.DO 1.00 $18 $18.00 $ 18.00 Light Bulb MR.07.14.X5.DO 1.00 $150 $150.00 150.00 Applied Overhead Labor Hours 1.00 $20 $20.00 20.00 1.00 $18.00 $150.00 $20.00 $188.00 Castle Electric Job Cost Sheet Job: Job B - TechWay Office Park Form Reference Direct Labor Direct Material Applied Overhead Total Hours Rate Total Qty. Unit Cost Total Basis Qty. Rate Total July 14, 20X5 Donnie Odom DTS.07.14.X5.DO 2.00 $18 $36.00 $ 36.00 Breakers MR.07.14.X5.DO 20 $20 $400.00 400.00 Applied Overhead Labor Hours 2.00 $20 $40.00 40.00 2.00 $36.00 $400.00 $40.00 $476.00 Castle Electric Job Cost Sheet Job: Job C - Lybrand Home Form Reference Direct Labor Direct Material Applied Overhead Total Hours Rate Total Qty.
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