Job Order Cost Accounting

1. 21 Job Order Cost Accounting • Job Order Cost Flow • Reporting Job Cost Data • Under- or Overapplied Overhead

2. Beginning Inventory Balances Job 315 Dining Tables (50) Beg 3,100 Direct Materials Work in Process Finished Goods Materials Maple $5,430 Labor Aug (110 hrs) 2,300 Overhead Aug-03 770 ------------ Total Cost $8,500 Unit Cost $ 170 Beg 5,822 Beg 1,700 10 tables remain in inventory

3. Beginning Inventory Balances Job 316 Oak Cabinets (24) Direct Materials Work in Process Finished Goods Materials Oak $4,800 Labor Aug (36 hrs) 770 Overhead Aug 252 Total Cost Unit Cost Beg 3,100 Beg 5,822 Accumulated cost of inventory not yet complete Beg 1,700

4. Purchasing Direct Materials Direct Materials Accounts Payable Beg 3,100 23,700 23,700

5. Direct Materials Requisition Job 317 Credenzas (30) Direct Materials Work in Process Materials Mahogany $7,500 Labor Overhead Total Cost Unit Cost Beg 3,100 Beg 5,822 Job 318 Coffee Tables (40) 23,700 Materials Maple $3,700 Labor Overhead 11,200 11,200

6. Recording Direct Labor Time Summary Sep-03 Wood, K. Time Summary Sep-03 Clemens, R. Time Summary Sep-03 Martinez, P. Factory Labor Wages Payable Shop Assistance 138 hrs $1,380 Job 316 83 hrs $1,826 Job 317 60 hrs 1,320 Job 318 41 hrs 902 Total $4,048 Job 316 49 hrs $ 980 Job 317 90 hrs 1,800 Job 318 39 hrs 780 Total $3,560 8,988 8,988

7. Recording Direct Labor Job 316 Oak Cabinets (24) Job 318 Coffee Tables (40) Materials Mahogany $7,500 Labor Materials Maple $3,700 Labor Materials Oak $4,800 Labor Aug (36 hrs) 770 Time Summary Sep-03 Clemens, R. Time Summary Sep-03 Martinez, P. Job 317 Credenzas (30) Job 316 83 hrs $1,826 Job 317 60 hrs 1,320 Job 318 41 hrs 902 Total $4,048 Job 316 49 hrs $ 980 Job 317 90 hrs 1,800 Job 318 39 hrs 780 Total $3,560 Sep (150 hrs) 3,120 Sep (80 hrs) 1,682 Sep (132 hrs) 2,806

8. Recording Direct Labor Time Summary Sep-03 Clemens, R. Time Summary Sep-03 Martinez, P. Factory Labor Work in Process Job 316 83 hrs $1,826 Job 317 60 hrs 1,320 Job 318 41 hrs 902 Total $4,048 Job 316 49 hrs $ 980 Job 317 90 hrs 1,800 Job 318 39 hrs 780 Total $3,560 8,988 Beg 5,822 11,200 7,608 7,608

9. Recording Factory Overhead Incurred Factory Overhead Time Summary Sep-03 Wood, K. Shop Assistance 138 hrs $1,380 Factory Labor Accounts Payable 8.988 7,608 1,380 320 Utilities $320 1,380 320

10. Recording Factory Overhead Incurred Factory Overhead Time Summary Sep-03 Wood, K. 1,380 Shop Assistance 138 hrs $1,380 320 Cash Accum Depreciation 212 470 Utilities $320 212 Property Tax $212 Depreciation $470 470

11. Applying Factory Overhead Job 316 Oak Cabinets (24) Job 318 Coffee Tables (40) Job 317 Credenzas (30) Materials Oak $4,800 Labor Aug (36 hrs) 770 Sep (132 hrs) 2,806 Overhead Aug 252 Materials Maple $3,700 Labor Sep (80 hrs) 1,682 Overhead Materials Mahogany $7,500 Labor Sep (150 hrs) 3,120 Overhead Factory Overhead Work in Process   Sep 1,050 Sep 560 Sep 924 2,534 2,534

12. Completing a Job Work in Process Job 316 Oak Cabinets (24) Job 317 Credenzas (30) Finished Goods Materials Oak $4,800 Labor Aug (36 hrs) 770 Sep (132 hrs) 2,806 Overhead Aug 252 Sep 924 Total Cost $9,552 Unit Cost $398 Materials Mahogany $7,500 Labor Sep (150 hrs) 3,120 Overhead Sep 1,050 --------- Total Cost $11,670 Unit Cost $389 Beg 5,822 11,200 7,608 2,534 Beg 1,700 9,552 11,670 9,552 11,670

13. Selling Goods Finished Goods Cost of Goods Sold Sales Cash Beg 1,700 9,552 11,670  9 x $170 24 x $398 25 x $389 2,700 13,200 14,500 2,700 13,200 14,500 1,530 9,552 9,725 1,530 9,552 9,725

14. Transaction Summary Dir Materials WIP FG CGS F. Labor Manuf OH 3,100 5,822 1,700 11,200 23,700 11,200 9,552 9,552 11,670 11,670 1,530 1,530 8,988 7,608 7,608 9,552 9,552 1,380 9,725 9,725 1,380 2,534 2,534 320 212 470

15. Predetermined Overhead Rates $30,100 Estimated overhead costs 4,300 DL hours Estimated operating activity Overhead Rate = = = $7 / DLH Apply overhead based on actual operating activity. Job 317 : 150 hours X $7 = $1,050.00

16. Ending Inventory Balances Job 318 Coffee Tables (40) WIP 5,822 Materials Maple $3,700 Labor Sep (80 hrs) 1,682 Overhead 11,200 9,552 11,670 7,608 Sep 560 2,534 WIP balance should match job cost sheet(s). 5,942

17. Ending Inventory Balances FG Job 315 Dining Tables (50) Job 317 Credenzas (30) Job 316 Oak Cabinets (24) 1,700 Materials Mahogany $7,500 Labor Sep (150 hrs) 3,120 Overhead Sep 1,050 --------- Total Cost $11,670 Unit Cost $389 Materials Oak $4,800 Labor Aug (36 hrs) 770 Sep (132 hrs) 2,806 Overhead Aug 252 Sep 924 Total Cost $9,552 Unit Cost $398 Materials Maple $5,430 Labor Aug (110 hrs) 2,300 Overhead Aug-03 770 _______ Total Cost $8,500 Unit Cost $170 9,552 11,670 1,530 9,552 9,725 x 1 x 0 x 5 2,115

18. Reporting Job Cost Data WIP 5,822 11,200 9,552 11,670 7,608 2,534 Cost of Goods Manufactured WIP 9/1/03 $5,822 DM $11,200 DL 7,608 MOH applied 2,534 Total 21,342 Total cost WIP $27,164 Less: WIP 9/30 5,942 Cost of Goods Manuf $21,222 5,942

19. Reporting Job Cost Data FG 1,700 9,552 11,670 1,530 9,552 9,725 Income Statement (partial) Sales $30,400 Cost of Goods Sold FG 9/1 $ 1,700 CGM 21,222 CG Avail $22,922 FG 9/30 2,115 CGS 20,807 Gross Profit $ 9,593 2,115

20. Under- or Overapplied MOH Factory Overhead   1,380 320 212 470 2,534 Cost of Goods Sold    Applied overhead does not always equal actual. At year end, close any remaining balance to CGS. Actual overhead Applied overhead 237 237 237