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COST ACCOUNTING (JOB ORDER COSTING & PROCESS COSTING) Question 01: Blake Cement (Pvt.) Ltd is engaged...

COST ACCOUNTING

(JOB ORDER COSTING & PROCESS COSTING)

Question 01: Blake Cement (Pvt.) Ltd is engaged in the manufacturing of different kinds of cement. The production facility is located near Houston. It received an order from Triton Industries for 2,000Kg of white cement on October 01, 2016. This order is assigned Job number 313. The following information is available for the month of November 2016:

  • Material purchased during the month amounted to $50,000.

  • 50% of this material was assigned to Job# 313. Each bag uses $1,250 of material.

  • Labor hours available in the month were 292. Each hour is paid @ $12 per hour. 200 hours were allocated to Job 313. Every 10Kg of cement requires 1 hour.

  • FOH is applied @ $20 per machine hour. A total of 200 machine hours were available in October.

Job # 313 utilized 145 machine hours. Every 20Kg bag of cement requires 1.45 hours on the machine.

  • Actual FOH amounted to $1,500.

  • Each cement bag weighs 20Kg and is sold for $1,800.

REQUIRED: You are required to:

  1. Prepare a Job Order Cost Sheet (Job# 313) for the month of October 2016.

  2. Pass necessary journal entries in the books of Triton Industries, assuming that the order was ready on October 25, but was shipped to customer on October 27, that was the required date provided by the customer for the order.

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Note : the material required for 100 bags is more than the material assigned. It is assumed that additional material was made available to complete the order.

Order Each Ba No of Ba 2000 20 100 Materials (1250xFactory Labor 100 Overhead $20 per machine hour (145 20) Total Job No Job 313 Total Begininng Balance 200 12 125,000 2,400 2,900 2,900 130,300 130,300 $0 125,000 Prepare journal entries to record the transactions given above Transaction Debit General Journal raw Material Accounts Payable raw materials purchased Credit 50,000 50,000 Factory Pavroll Wages Payable 2,400 2,400 Work in process 125,000 Raw Material 125,000 raw materials issued to production Work-in Process Factory Pavroll 2,400 2,400 Direct Labor Manufacturing Overhead Cash (Actual factory overhhead) 1,500 1,500 Work-in Process Manufacturing Overhead (FOH applied) 2,900 2,900 Finished Goods Work in process 130,300 130,300 Job 313 transferred to the finished goods h1 Accounts Receivable Sales (Job 111 sold) 180,000 180,000 h2 Cost of Goods Sold Finished Goods 130,300 130,300 e total cost of Job 313 to produce the s that were sold Journal entry to dis of balance in Manufacturing overhead account Debit Credit Manufacturing Overhead Cost of Goods Sold 1,400 1,400

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