Question

Coronado Printing Corp. uses a job order cost system. The following data summarize the operations related to the first quarter’s production. 1. Materials purchased on account $197,100, and factory wages incurred $93,300. 2. Materials requisitioned and factory labor used by job: Job Number Materials Factory Labor A20 $37,840 $19,000 A21 44,620 23,700 A22 36,700 15,700 A23 40,370 26,500 General factory use 5,270 8,400 $164,800 $93,300 3. Manufacturing overhead costs incurred on account $52,200. 4. Depreciation on factory equipment $16,750. 5. Depreciation on the company’s office building was $15,000. 6. Manufacturing overhead rate is 86% of direct labor cost. 7. Jobs completed during the quarter: A20, A21, and A23.

Exercise 15-08 (Video) Coronado Printing Corp. uses a job order cost system. The following data summarize the operations related to the first quarter's production. 1. Materials purchased on account $197,100, and factory wages incurred $93,300. 2. Materials requisitioned and factory labor used by job: Job Number Materials A20 A21 A22 $37,840 44,620 36,700 40,370 5,270 Factory Labor $19.000 23,700 15,700 26,500 8,400 $93,300 A23 General factory use $164,800 3. Manufacturing overhead costs incurred on account $52,200. 4. Depreciation on factory equipment $16,750. 5. Depreciation on the company's office building was $15,000. 6. Manufacturing overhead rate is 86% of direct labor cost. 7. Jobs completed during the quarter: A20, A21, and A23. Prepare a schedule showing the individual cost elements and total cost for each job in item 7. Direct Direct Manufacturing Job Materials Labor Overhead Total A20 $ $ A21 A23 $ Prepare entries to record the operations summarized above. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit No. Account Titles and Explanation (1) Raw Materials Inventory Accounts Payable (To record materials purchases) Factory Labor Factory Wages Payable (To record factory wages) (2) Work in Process Inventory Manufacturing Overhead Raw Materials Inventory (To record materials put into production) Work in Process Inventory Manufacturing Overhead Factory Labor

Answer 1

Prepare a schedule showing the individual cost elements and total cost for each job in item 7? Answer: Direct Manufacturing Job Materials Direct labor Overhead* Total A20 $37,840.00 $ 19,000.00 $ 16,340.00 $ 73,180.00 A21 $ 44,620.00 $ 23,700.00 $ 20,382.00 $ 88,702.00 A23 $ 40,370.00 $ 26,500.00 $ 22,790.00 $ 89,660.00 $ 251,542.00 * Manufacturing overheads are computed as 86% of respective direct labor.

Prepare entries to record the operations summarized above? Answer: Credit $ 197,100.00 $ 93,300.00 $164,800.00 No. Account Titles and Explanation Debit 1 Raw material inventory $ 197,100.00 Accounts payable (To record materials purchase) Factory labor $ 93,300.00 Factory wages payable (To record factory wages) 2 Work in process inventory $ 159,530.00 Manufacturing overhead $ 5,270.00 Raw material inventory (To record materials put into production) Work in process inventory $ 84,900.00 Manufacturing overhead $ 8,400.00 Factory labor (To record labor put into production) 3 Manufacturing overhead $ 52,200.00 Accounts payable 4 Manufacturing overhead $ 16,750.00 Accumulated Depreciation - equipment 5 Depreciation expense $ 15,000.00 Accumulated depreciation - buildings 6 Work in process inventory (86% of 84,900 in 2 entry) $ 73,014.00 Manufacturing overhead 7 Finished goods inventory $ 251,542.00 Work in process inventory $ 93,300.00 $ 52,200.00 $ 16,750.00 $ 15,000.00 $ 73,014.00 $ 251,542.00

(a) Determine the cost of each job? Answer: Cost Coronado $ 10,542.00 Sunland $ 13,387.00 Bonita $ 6,498.00 Direct Auditor Overhead Job Materials labor costs costs* Total Coronado $ 710.00 $5,500.00 $ 4,332.00 $ 10,542.00 Sunland $ 500.00 $ 7,700.00 $ 5,187.00 $ 13,387.00 Bonita $ 230.00 $3,475.00 $ 2,793.00 $ 6,498.00 $ 30,427.00 Overhead costs are computed as respective auditor hours multiplies by predetermined overhead rate of $57.

(b) Indicate the balance of the service contracts in process account at the end of November? Answer: Balance in service contracts in process account: $ 10,542. As given in the question that only coronado job alone is incomplete at the end of the november the pending service contracts will be coronado only and hence $10,542. (c) Calculate the ending balance of the operating overhead account for November? Answer: Actual overheads for the november $12,600.00 Applied overheads for the November $ 12,312.00 Balance in operating overhead account $ 288.00 Underapplied

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