chapter 4 job costing

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Ch4 Job costing A job-costing system has a sep record is typically found in a sul Control presents the total system has a separate job-cost record for each job. A summary of the job-cost ypically found in a subsidiary leder. The general ledger account-Work-in-Process presents the total of these separate job cost records pertaining to all unfinished jobs. The job-cost records and Work-in-Process Control account track job costs account track job costs from when jobs start until they are complete. When jobs are ed or sold, they are recorded in the finished-goods inventory records of jobs in the Subsidiary ledger. The general ledger account Finished Goods Control records the total of these separate job-cost records for all jobs completed and subsequently for all jobs sold. General ledger accounts with "Control" in their titles (for example, Materials Control and Accounts Payable Control) have underlying subsidiary ledgers that contain additional details, such as each type of material in inventory and individual suppliers Robinson must pay. Some companies simultaneously make entries in the general ledger and subsidiary ledger accounts. Others, such as Robinson, simplify their accounting by making entries in the subsidiary ledger when transactions occur and entries in the general ledger less frequently, often on a monthly basis, only when monthly financial statements are prepared Under normal costing, manufacturing overhead allocated or manufacturing overhead applied is the amount of manufacturing overhead costs allocated to individual jobs based on the budgeted rate ($40 per direct manufacturing labor-hour) multiplied by the actual quantity of the allocation base used for each job. (The total actual direct manufacturing labor-hours across all jobs in February 2017 total 2,000.) Manufacturing overhead allocated contains all manufacturing overhead costs assigned to jobs using a cost-allocation base because overhead costs cannot be traced specifically to jobs in an economically feasible way. Actual overhead costs incurred throughout the month are added (debited) to the Manufacturing Overhead Control account. These costs are not debited to Work-in-Process Control because, unlike direct costs, they cannot be traced to individual jobs. Manufacturing overhead costs are added (debited) to individual jobs and to Work-in-Process Control only when manufacturing overhead costs are allocated. At the time these costs are allocated, Manufacturing Overhead Control is, in effect, decreased (credited) via its contra account, Manufacturing Overhead Allocated. Manufacturing Overhead Allocated is referred to as a contra account because the amounts debited to it represent the amounts credited to the Manufacturing Overhead Control account. Having Manufacturing Overhead Allocated as a contra account allows the job-costing system to separately retain information about the manufacturing overhead costs the company has incurred in the Manufacturing Overhead Control account) as well as the amount of manufacturing overhead costs it has allocated in the Manufacturing Overhead Allocated account) Ch4 Job costing Do the JE and posting them to T-accounts, and IS company Robinson has Jobi 1, Job12 and Job#3 monthly transactions and journal entries that follow ($1000 unit): 1. Purchases of materials (direct and indirect) on credit, $90 Materials Control Accounts Payable ao 2. Usage of direct materials, $80, and indirect materials, $4 Work-in- process Control 84. Manufacturing overhead Content 80 Materials Control 3. Manufacturing payroll for February: direct labor. S40, and indirect labor, $15, paid in cash work-in-process control 40 Manufacturing overhead control Cash Control 55 IS 4. Other manufacturing overhead costs incurred during February, $75,000, consisting of Supervision and engineering salaries, $42 (paid in cash); plant utilities, repairs, and insurance, $12 (paid in cash); and . Plant depreciation, $18 Manufacturing Overhead Control - Cash Control Accumulated Depreciation Control 5. Equipment depreciation $5 used solely for job #1 o. Machinery depreciation %6 used for marketing employees and managers 7. Allocation of manufacturing overhead to jobs, $80 8. The sum of all individual jobs completed and transferred to finished goods in February 2017 is $190 9. Cost of goods sold, $180 10. Marketing costs for February 2017, $46, and customer-service costs for February 2017, S14, paid in cash 11. Sales revenues from all jobs all jobs sold and delivered in February 2017, all on credit, $280 12. Do all the related JE and posting JE to T-accounts. 13. How much manufacturing overhead is under-allocated or over-allocated in 2017 14. Prorate the difference into FG, COGS and WIP based on the accounts balances of these accounts before the proration. 15. Do the adjusted JE according the results of proration. 16. Assuming before adjustment made, the manufacturing overhead COGS is $45, and WIP is $15, prorate the difference form part these accounts at eh end of period. he manufacturing overhead allocated to FG is $20, 13, prorate the difference form part 13. on the basis of the balances of 17. Do the adjusted JE according the results of proration. 18. Same as in previous information, so JE assuming directly write-off the variances Do the JE and posting them to T-accounts, using Excel sheet