comparison of methods Ralph's Job deals with a small eustom fabrieator of display eabinets. The accounting system separately accumulates direet labor eost, direet material eost, and two overhead pools. The overhead pools are denoted, respeetively, DV A and DV B'

A reeent reporting period begins with no work-in-process inventory. During the period three jobs

(a, b and

e) were worked on. The first two have been completed, and delivered to their eustomers while the third Gob

e) remains partially eomplete at the end of the period. (The data are scaled in what follows for presentation purposes.)

Various overhead and period eosts ineurred are as foIlows:

overhead A overhead B ~eriod eosts hourly labor $2,000 $1,000 $1,000 salary labor 4,000 5,000 6,000 various materials 4,000 10,000 12,000 heat and light 8,000 1,000 depreciation 6,000 2,000 2,000 mise. 9,000 5,000 3,000 Direet labor and direet material aetivities are summarized as follows:
job a job b job e direct labor $2,200 $2,500 $3,500 direet material $1,800 $5,000 $4,000 In addition, the overhead ll..AS are given by OV A = 22,000 + 1.00DL$ and OV B = 20,000 + .50DM$ (where DL$ denotes direet labor dollars and DM$ denotes direct material dollars).
a] Suppose an aetual, full eost system is used. Reeord these various events with journal entries. Use an aeeount titled "misc. credits" to reeord the eredits forwages payable, depreciation, materials, and so on. Bc eertain to identify the eost of eaeh job, the ending work-in-process inventory balanee, and eost of goods sold. (Notiee you will use the LLAs only to identify the appropriate alloeation base for eaeh overhead pool.)
b] Repeat la] for the ease where a normal, full eosting system is used. Assume respeetive normal volumes of DL$ = 10,000 and DM$ = 10,000 for the two overheadpools.
e] Repeat la] for the ease where normal, variable eosting is used.AppendixLO1