Evian has two major public-park projects to provide with comprehensive

irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres

of landscaped terrain which will require special-order sprinkler heads to meet the specifications

of the project. Using a job cost system to produce these parts, the following

events occurred during December 2012:

Raw materials were requisitioned from the companys inventory on December 2 for

$4,995; on December 8 for $960; and on December 14 for $3,306. In each instance, two-

thirds (2/3) of these materials were for J57 and the rest for K52.

Six time tickets were turned in for these two projects for a total amount of 18 hours

of work. All the workers were paid $16.50 per hour. The time tickets were dated December 3,

December 9, and December 15. On each of those days, 6 labor hours were spent on these

jobs, two-thirds (2/3) for J57 and the rest for K52.

The predetermined overhead rate is based on machine hours. The expected machine

hour use for the year is 2,112 hours, and the anticipated overhead costs are $842,688

for the year. The machine were used by workers on projects K52 and J57 on December 3, 9,

and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hours

were used for project J57 (2.5 the first day and 3 each of the other days). Both of these

special orders were completed on December 15, producing 235 sprinkler heads for J57

and 145 sprinkler heads for K52.

Additional job order activities during this period of time included:

Dec. 1 Purchased raw materials from Durbin Supply Company on account for $53,200.

Dec. 2 Issued $42,000 of direct materials from the companys inventory to jobs other than K52 and J57 and $3,000 of indirect materials.

Dec. 12 Paid Evians factory salaries and wages in the amount of $67,000.

Dec. 13 Paid the factorys water bill of $3,000.

Dec. 18 Transferred $50,000 of costs from other completed jobs to finished goods.

Dec. 21 Paid the factorys electric bill of $12,000 for factory.

Instructions for part 2

(a) Set up the job cost sheets for Job No. J57 and Job No. K52. Determine the total cost for each manufacturing special order for these jobs. (Round unit cost to nearest cent.)

(b) Journalize the activities from these job cost sheets in the general journal. Also journalize the other costs that occurred during this period of time.

(c) Assuming that Manufacturing Overhead has a credit balance of $3,400, determine whether overhead has been under/over applied and make the adjusting entry.