Date Materials Requisition Description Amount No. 11/30 437 60 pounds rubber at $14 $ 840 12/2 439 $ 480 40 meters polyester fabric at $12 12/3 501 100 meters steel cord at $8 $ 800 Durable Tire allocates manufacturing overhead to jobs on the basis of the relationship between expected overhead costs ($529,000) and expected direct labor hours (23,000). Job 298 was completed on December 3 and shipped to ATV on December 5. Requirements 1. Prepare a job cost record for Job 298. 2. Calculate the total profit and the per-unit profit for Job 298. P3-55B Determine and record job costs (Learning Objectives 2, 3, 4, &6) Red Canyon Homes manufactures prefabricated chalets in Colorado. The company uses a perpetual inventory system and a job cost system in which each chalet is a job. The following events occurred during May: a. Purchased materials on account, $470,000. b. Incurred total manufacturing wages of $115,000, which included both direct labor and indirect labor. Used direct labor in manufacturing as follows: Direct Labor Chalet 13 $14,600 Chalet 14 $28.000 Chalet 15 $19,300 Chalet 16 $21,400 c. Requisitioned direct materials in manufacturing as follows: Direct Materials Chalet 13 $41,500 Chalet 14 $56,700 Chalet 15 $62,700 Chalet 16 $66,000 d. Depreciation of manufacturing equipment used on different chalets, $6,500. e. Other overhead costs incurred on Chalets 13-16: Equipment rentals paid in cash $10,000 Prepaid plant insurance expired $6,000 f. Allocated overhead to jobs at the predetermined rate of 60% of direct labor cost. & Chalets completed: 13, 15, and 16. h. Chalets sold on account: 13 for $93,000; 16 for $144,000. Kequirements 1. Record the events in the general journal. 2. Open T-accounts for Work in Process Inventory and Finished Goods Inventory. Post the appropriate entries to the T-accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. 3. Summarize the job cost of the unfinished chalet, and show that this total amount equals the ending balance in the Work in Process Inventory account 4. Summarize the job cost of the completed chalet that has not yet been sold and show that this equals the ending balance in Finished Goods Inventory 5. Compute gross profit on each chalet that was sold. What costs must gross profit cover for Red Canyon Homes? Determine flow of costs through accounts (Learning Objectives 2 & 6) Engine Pro reconditions engines. Its job costing records yield the following information Engine Pro uses a perpetual inventory system. P3-56B Date Total Cost of Total Manufacturing Job at April 30 Cost Added in May Job Started Finished Sold No. 1 3/26 4/7 4/9 $1,800 2 4/3 4/12 4/13 $1,300 3 4/29 4/30 5/3 $1,500 4 4/30 5/1 5/1 $ 300 $ 800 5 5/8 5/12 5/14 $ 500 6 5/23 6/6 6/9 $1,900 Kequirements 1. Compute Engine Pro's cost of (a) Work in Process Inventory at April 30 and May 31, (b) Finished Goods Inventory at April 30 and May 31, and (c) Cost of Goods Sold for April and May. 2. Make summary journal entries to record the transfer of completed jobs from Work in Process to Finished Goods for April and May. 3. Record the sale of Job 5 on account for $2,300. 4. Compute the gross profit for Job 5. What costs must the gross profit cover? Serial Case C3-57 Calculate operating income (Learning Objectives 1, 2, 3, 4, & 7) This case is a continuation of the Caesars Entertainment Corporation serial case that began in chapter 10. Refer to the introductory story in Chapter 1 for additional background. (The components of the Caesars serial case can be completed in any order.) Caesars Palace Las Vegas offers several wedding packages for on-site wedding ceremonies and/or receptions. Packages can include limousines, flowers, photographers, pianist/organist, and other services. Caesars charges a flat fee for the basic wedding package plus additional charges for a la carte or individually added-on items and services. Each wedding is facilitated by a Caesars wedding coordinator; assume that the planning services of a wedding coordinator are paid on an hourly basis. 1. Would Caesars be likely to use a job costing system or a process costing system for determining the costs and profit for each wedding? Explain. 2. If Caesars uses a job costing system for a wedding, describe what cost items might be included in each of the following categories: a. Direct material b. Direct labor c. Overhead Date Materials Requisition Description Amount No. 11/30 437 60 pounds rubber at $14 $ 840 12/2 439 $ 480 40 meters polyester fabric at $12 12/3 501 100 meters steel cord at $8 $ 800 Durable Tire allocates manufacturing overhead to jobs on the basis of the relationship between expected overhead costs ($529,000) and expected direct labor hours (23,000). Job 298 was completed on December 3 and shipped to ATV on December 5. Requirements 1. Prepare a job cost record for Job 298. 2. Calculate the total profit and the per-unit profit for Job 298. P3-55B Determine and record job costs (Learning Objectives 2, 3, 4, &6) Red Canyon Homes manufactures prefabricated chalets in Colorado. The company uses a perpetual inventory system and a job cost system in which each chalet is a job. The following events occurred during May: a. Purchased materials on account, $470,000. b. Incurred total manufacturing wages of $115,000, which included both direct labor and indirect labor. Used direct labor in manufacturing as follows: Direct Labor Chalet 13 $14,600 Chalet 14 $28.000 Chalet 15 $19,300 Chalet 16 $21,400 c. Requisitioned direct materials in manufacturing as follows: Direct Materials Chalet 13 $41,500 Chalet 14 $56,700 Chalet 15 $62,700 Chalet 16 $66,000 d. Depreciation of manufacturing equipment used on different chalets, $6,500. e. Other overhead costs incurred on Chalets 13-16: Equipment rentals paid in cash $10,000 Prepaid plant insurance expired $6,000 f. Allocated overhead to jobs at the predetermined rate of 60% of direct labor cost. & Chalets completed: 13, 15, and 16. h. Chalets sold on account: 13 for $93,000; 16 for $144,000. Kequirements 1. Record the events in the general journal. 2. Open T-accounts for Work in Process Inventory and Finished Goods Inventory. Post the appropriate entries to the T-accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. 3. Summarize the job cost of the unfinished chalet, and show that this total amount equals the ending balance in the Work in Process Inventory account 4. Summarize the job cost of the completed chalet that has not yet been sold and show that this equals the ending balance in Finished Goods Inventory 5. Compute gross profit on each chalet that was sold. What costs must gross profit cover for Red Canyon Homes? Determine flow of costs through accounts (Learning Objectives 2 & 6) Engine Pro reconditions engines. Its job costing records yield the following information Engine Pro uses a perpetual inventory system. P3-56B Date Total Cost of Total Manufacturing Job at April 30 Cost Added in May Job Started Finished Sold No. 1 3/26 4/7 4/9 $1,800 2 4/3 4/12 4/13 $1,300 3 4/29 4/30 5/3 $1,500 4 4/30 5/1 5/1 $ 300 $ 800 5 5/8 5/12 5/14 $ 500 6 5/23 6/6 6/9 $1,900 Kequirements 1. Compute Engine Pro's cost of (a) Work in Process Inventory at April 30 and May 31, (b) Finished Goods Inventory at April 30 and May 31, and (c) Cost of Goods Sold for April and May. 2. Make summary journal entries to record the transfer of completed jobs from Work in Process to Finished Goods for April and May. 3. Record the sale of Job 5 on account for $2,300. 4. Compute the gross profit for Job 5. What costs must the gross profit cover? Serial Case C3-57 Calculate operating income (Learning Objectives 1, 2, 3, 4, & 7) This case is a continuation of the Caesars Entertainment Corporation serial case that began in chapter 10. Refer to the introductory story in Chapter 1 for additional background. (The components of the Caesars serial case can be completed in any order.) Caesars Palace Las Vegas offers several wedding packages for on-site wedding ceremonies and/or receptions. Packages can include limousines, flowers, photographers, pianist/organist, and other services. Caesars charges a flat fee for the basic wedding package plus additional charges for a la carte or individually added-on items and services. Each wedding is facilitated by a Caesars wedding coordinator; assume that the planning services of a wedding coordinator are paid on an hourly basis. 1. Would Caesars be likely to use a job costing system or a process costing system for determining the costs and profit for each wedding? Explain. 2. If Caesars uses a job costing system for a wedding, describe what cost items might be included in each of the following categories: a. Direct material b. Direct labor c. Overhead