Alamo Co. manufactures tires for all-terrain vehicles. Alamo uses job order costing and has a perpetual inventory system.

On June 22, 2008, Alamo received an order for 100 TX tires from ATV Corporation at a price of \($55\) each. The job, assigned number 300, was promised for July 10. After purchasing the materials, Alamo began production on June 30 and incurred the following costs in completing the order:

Alamo allocates manufacturing overhead to jobs on the basis of the relation between estimated overhead (\($400,000)\) and estimated direct labor cost (\($250,000).\) Job 300 was completed on July 3 and shipped to ATV on July 5.

Requirements 

1. Prepare a job cost record similar to Exhibit 19-7 for Job 300. Calculate the predetermined overhead rate, then apply manufacturing overhead to the job.

2. Journalize in summary form the requisition of direct materials and the assignment of direct labor and manufacturing overhead to Job 300.

3. Journalize completion of the job and sale of the tires.

Exhibit 19-7

Transcribed Image Text:

Date Labor Time Record No. 6/30 1896 7/3 1904 Description 12.5 hours @ $20 30 hours @ $19 Amount $250 570