Question Details

(Solution Download) Degelman Company uses a job order cost system and applies overhead to production on the basis of dir


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Degelman Company uses a job order cost system and applies

 

overhead to production on the basis of direct labor costs. On

 

January 1, 2014, Job No. 50 was the only job in process. The costs

 

incurred prior to January 1 on this job were as follows: direct

 

materials $22,200, direct labor $13,320, and manufacturing overhead

 

$17,760. As of January 1, Job No. 49 had been completed at a cost

 

of $99,900 and was part of finished goods inventory. There was a

 

$16,650 balance in the Raw Materials Inventory account.

 


 

During the month of January, Deglman Manufacturing began production

 

on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50

 

were also sold on account during the month for $135,420 and

 

$175,380, respectively. The following additional events occurred

 

during the month.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.Purchased additional raw materials of $99,900 on account.
2.Incurred factory labor costs of $77,700. Of this amount $17,760

 

related to employer payroll taxes.

3.Incurred manufacturing overhead costs as follows: indirect

 

materials $18,870; indirect labor $22,200; depreciation expense on

 

equipment $21,090; and various other manufacturing overhead costs

 

on account $17,760.

4.Assigned direct materials and direct labor to jobs as

 

follows.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Job No.

 

 

Direct Materials

 

 

Direct Labor

 

50$11,100$5,550
5143,29027,750
5233,30022,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculate the predetermined overhead rate for 2014, assuming

 

Degelman Company estimates total manufacturing overhead costs of

 

$1,087,800, direct labor costs of $777,000, and direct labor hours

 

of 22,200 for the year.(Round answer to the nearest

 

whole percent, e.g. 25.)

 

 

 

 

 

 

 

 

 

 

Predetermined overhead rate%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Open job cost sheets for Jobs 50, 51, and 52. Enter the January

 

1 balances on the job cost sheet for Job No. 50.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Job No. 50

 

 

Date

 

 

Direct Materials

 

 

Direct Labor

 

 

Manufacturing Overhead

 

Beg.

 

$

 

 

$

 

 

$

 

Jan.

 

 

 

 

 

 

 

$

 

 

$

 

 

$

 

Cost of completed job
   Direct materials

 

$

 

   Direct labor

 

 

   Manufacturing overhead

 

 

Total cost

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Job No. 51

 

 

Date

 

 

Direct Materials

 

 

Direct Labor

 

 

Manufacturing Overhead

 

Jan.

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Cost of completed job
   Direct materials

 

$

 

   Direct labor

 

 

   Manufacturing overhead

 

 

Total cost

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Job No. 52

 

 

Date

 

 

Direct Materials

 

 

Direct Labor

 

 

Manufacturing Overhead

 

Jan.

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepare the journal entries to record the purchase of raw

 

materials, the factory labor costs incurred, and the manufacturing

 

overhead costs incurred during the month of January.

 

(Credit account titles are automatically indented when

 

amount is entered. Do not indent manually.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No.

 

 

Account Titles and Explanation

 

 

Debit

 

 

Credit

 

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepare the journal entries to record the assignment of direct

 

materials, direct labor, and manufacturing overhead costs to

 

production. In assigning manufacturing overhead costs, use the

 

overhead rate calculated in (a).(Credit account titles

 

are automatically indented when amount is entered. Do not indent

 

manually.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No.

 

 

Account Titles and Explanation

 

 

Debit

 

 

Credit

 

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total the job cost sheets for any job(s) completed during the

 

month. Prepare the journal entry (or entries) to record the

 

completion of any job(s) during the month. (Credit

 

account titles are automatically indented when amount is entered.

 

Do not indent manually.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Account Titles and Explanation

 

 

Debit

 

 

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepare the journal entry (or entries) to record the sale of

 

any job(s) during the month. (Credit account titles are

 

automatically indented when amount is entered. Do not indent

 

manually.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No.

 

 

Account Titles and Explanation

 

 

Debit

 

 

Credit

 

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

(To record cost of jobs.)

 

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

(To record sale of jobs.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

What is the balance in the Finished Goods Inventory account at

 

the end of the month? What does this balance consist of?

 

 

 

 

 

 

 

 

 

 

 

Finished Goods Inventory

 

$

 

Job

 

No. 50Job No. 51Job No. 52Jobs 50 and 51Jobs 51 and 52Jobs 50 and

 

52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

What is the amount of over- or underapplied overhead?

 

 

 

 

 

 

 

 

 

 

 

Manufacturing Overhead

 

$

 

 

OverappliedUnderapplied

 

 

 

 


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