Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Chapter 3, Problem 3.48AP
Prepare job cost record (Learning Objectives 2, 3, & 4)
Chattanooga Tire manufactures tires for all-terrain vehicles. Chattanooga uses
On June 22, Chattanooga received an order for 110 TX tires from ATV Corporation at a price of $90 each. The job, assigned number 298, was promised for July 10. After purchasing the materials, Chattanooga began production on June 30 and incurred the following direct labor and direct materials costs in completing the order:
Chattanooga allocates manufacturing overhead to jobs on the basis of the relation between expected overhead costs ($490,000) and expected direct labor hours (17,500). Job 298 was completed on July 3 and shipped to ATV on July 5.
Requirements
- 1. Prepare a job cost record for Job 298.
- 2. Calculate the total profit and the per-unit profit for Job 298.
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Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given
that each construction job is different from any other, company accountant Susan Kalagnanam decided that it was best to use a job-
order costing system to allocate costs to the different jobs. She decided to use construction labour-hours as the basis for overhead
allocation. In December 2020, she estimated the following amounts for the year 2021:
Direct materials
Construction labour
Overhead
Construction labour-hours
Kalagnanam recorded the following for the first quarter of 2021 for the three jobs that the company started and completed during the
quarter:
Direct materials
Construction labour-hours
$13,395,200
8,165,000
8,847,700
460,000
Direct Material
Construction Labour
Overhead
Total cost
$
$753,500
School Residential
$904,200
36,800
62,100
Required:
1. Compute the cost of each job using the current system of cost allocation. (Round intermediate…
Waterway Guitar Company makes high-quality customized guitars. Waterway uses a job order costing system. Because the guitars are handmade, the company applies overhead based on direct labor hours. At the beginning of the year, the company estimated that total manufacturing overhead costs would be $307,500 and that 20,500 direct labor hours would be worked. At year-end, Daniel, the company’s founder and CEO, gives you the following information regarding Waterway’s operations.
1.
The beginning balances in the inventory accounts were:
Raw Materials Inventory
$7,900
Work in Process Inventory
$26,000
Finished Goods Inventory
$31,500
2.
During the year, the company purchased raw materials costing $102,000. All purchases were made on account.
3.
The production department requisitioned $98,000 of raw materials for use in production. Of those, 70% were direct materials and 30% were indirect materials.
4.
The company used 21,500 direct labor hours at a cost…
Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given
that each construction job is different from any other, company accountant Susan Kalagnanam decided that it was best to use a job-
order costing system to allocate costs to the different jobs. She decided to use construction labour-hours as the basis for overhead
allocation. In December 2020, she estimated the following amounts for the year 2021:
Direct materials
Construction labour.
Overhead
Construction labour-hours
Kalagnanam recorded the following for the first quarter of 2021 for the three jobs that the company started and completed during the
quarter:
Direct materials
$13,395,200
8,165,000
8,847,700
460,000
Construction labour-hours
$753,500
School Residential Cinema
$904, 200 $1,356,300
36,800
16,100
62,100
Required:
1. Compute the cost of each job using the current system of cost allocation. (Round intermediate calculations to 2 decimal places.)
Chapter 3 Solutions
Managerial Accounting (5th Edition)
Ch. 3 - (Learning Objective 1) For which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 3) The amount of manufacturing...Ch. 3 - (Learning Objective 4) Which of the following is...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - (Learning Objective 5) Assuming the amount of...Ch. 3 - Prob. 8QCCh. 3 - Prob. 9QCCh. 3 - Prob. 10QC
Ch. 3 - Identify product costs, period costs, and product...Ch. 3 - Decide on product costing system (Learning...Ch. 3 - Determine the flow of costs between inventory...Ch. 3 - Understanding key document terms in a job cost...Ch. 3 - Compute a professional billing rate (Learning...Ch. 3 - Prob. 3.6SECh. 3 - Continuation of S3-6: compute total allocated...Ch. 3 - Continuation of S3-7: determine over- or under...Ch. 3 - Prob. 3.9SECh. 3 - Calculate job cost and billing at appliance repair...Ch. 3 - Calculating overallocated or underallocated...Ch. 3 - Prob. 3.12SECh. 3 - Record manufacturing labor costs (Learning...Ch. 3 - Prob. 3.14SECh. 3 - Prob. 3.15SECh. 3 - Understanding key terms (Learning Objectives 1, 2,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Prob. 3.18AECh. 3 - Determine the cost of a job and use it for pricing...Ch. 3 - Compute a predetermined overhead rate and...Ch. 3 - Prob. 3.21AECh. 3 - Prob. 3.22AECh. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Job cost and bid price at a consulting firm...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Understand the flow of costs in a job cost shop...Ch. 3 - Prob. 3.33BECh. 3 - Prob. 3.34BECh. 3 - Prob. 3.35BECh. 3 - Sustainability and job costing (Learning...Ch. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Prob. 3.43BECh. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Job costing or process costing for wedding...Ch. 3 - Discussion Questions 1. Why would it be...Ch. 3 - Unwrapped or How Its Made Go to www.YouTube.com...Ch. 3 - Ethics involved with choice of cost driver...Ch. 3 - Prob. 3.61ACTCh. 3 - Issues with cost of job (Learning Objectives 2, 3,...
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