Exhibit 210 also shows purchases of raw materials for

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Survey of Accounting
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Chapter 10 / Exercise E10-13
Survey of Accounting
Warren
Expert Verified
livered, and Jobs B18 and B19 are still in process. Exhibit 2.10 also shows purchases of raw materials for $2,750, labor costs incurred for $5,300, and overhead costs of $6,720.Point:Study the flow of manufacturing costs through general ledger accounts and job cost sheets. Use Exhibit 2.11 as reinforcement.ROAD WARRIORSJob Order Manufacturing CostsFor Month Ended March 31, 2011Goods Cost ofOverheadin Finished GoodsExplanation Materials Labor Incurred Allocated Process Goods SoldJob B15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 600 $1,000 $1,600 $3,200Job B16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 800 1,280 2,380Job B17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500 1,100 1,760 $3,360Job B18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 700 1,120 $1,970Job B19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 600 960 1,810Total job costs . . . . . . . . . . . . . . . . . . . . . . . . 1,800 4,200 $6,720 $3,780 $3,360 $5,580Indirect materials . . . . . . . . . . . . . . . . . . . . . . 550 $ 550Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . 1,100 1,100Other overhead . . . . . . . . . . . . . . . . . . . . . . . 5,070Total costs used in production . . . . . . . . . . . . 2,350 $5,300 $6,720Ending materials inventory . . . . . . . . . . . . . . . 1,400Materials available . . . . . . . . . . . . . . . . . . . . . 3,750Less beginning materials inventory . . . . . . . . (1,000)Materials purchased . . . . . . . . . . . . . . . . . . . . $2,750EXHIBIT 2.10Job Order Costs of All Production ActivitiesThe upper part of Exhibit 2.11 shows the flow of these costs through general ledger ac-counts and the end-of-month balances in key subsidiary records. Arrow lines are numbered to show the flows of costs for March. Each numbered cost flow reflects several entries made in March. The lower part of Exhibit 2.11 shows summarized job cost sheets and their status at the end of March. The sum of costs assigned to the jobs in process ($1,970 1$1,810) equals the Web Consultant You are working on seven client engagements. Two clients reimburse your firm for actual costs plus a 10% markup. The other five pay a fixed fee for services. Your firm’s costs include overhead allo-cated at $47 per labor hour. The managing partner of your firm instructs you to record as many labor hours as possible to the two markup engagements by transferring labor hours from the other five. What do you do? Decision EthicsAnswer — p. 65
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Survey of Accounting
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Chapter 10 / Exercise E10-13
Survey of Accounting
Warren
Expert Verified
58Chapter 2 Job Order Costing and Analysis$3,780 balance in Goods in Process Inventory shown in Exhibit 2.10. Also, costs assigned to Job B17 equal the $3,360 balance in Finished Goods Inventory. The sum of costs assigned to Jobs B15 and B16 ($3,200 1$2,380) equals the $5,580 balance in Cost of Goods Sold.Exhibit 2.12 shows each cost flow with a single entry summarizing the actual individual en-tries made in March. Each entry is numbered to link with the arrow lines in Exhibit 2.11.EXHIBIT 2.11Job Order Cost Flows and Ending Job Cost SheetsMaterials purchasedDirect materials usedIndirect materials usedPayroll recordedDirect labor usedIndirect labor usedOther overhead usedOverhead allocatedFinished goodsGoods soldRaw MaterialsInventory*1,4001,0001,8002,750550Other AccountsFactoryOverhead05505,0706,7201,100Goods in ProcessInventory*1,8006,7208,9404,200Finished GoodsInventory*8,9405,5803,780FactoryPayroll5,30003,360Cost ofGoods Sold5,5805,5801,1004,200Goods in ProcessControlControlDetailFinished GoodsDelivered GoodsSubsidiary JobCost Sheets* The ending balances in the inventory accounts are carried to the balance sheet.

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