EXERCISE 3-1

Preparing a Job Cost Sheet[LO2-CC4]

Help Me Solve It Tutorial: Exercise 3-1 Watch this first.

https://connect.mheducation.com/connect/hmEBook.do?setTab=sectio

Biotechnologies Unlimited, Inc. (BUI), located in Sydney, Nova Scotia, is a small but growing biotech quality analysis organization that tests pesticides before they are used by farmers. The testing procedures are specific to the individual pesticides used because reagents used for testing react differently based on their composition and the quantity used. How they are introduced into the pesticides for testing is also important.

During the month of December 2016, it completed one job (reference number: KS 2016-337); records pertaining to this job are as follows:

Date

Document

Amount

2/12/16

M-3316

$890

4/12/16

L-4423

230

11/12/16

L-4437

530

13/12/16

M-3399

1,750

20/12/16

M-3407

200

22/12/16

L-4509

700

The documents with the references M and L pertain to direct materials and direct labour, respectively. BUI currently allocates overhead using direct labour cost as the allocation base. For the year 2016, it estimated $590,000 as the overhead amount and $472,000 for direct labour costs.

Required:

1.Compute the overhead allocation rate for 2016.

2.Compute the total costs of the job (show direct materials, direct labour, and overhead as separate line items).

3. job cost sheet for job KS 2016-337 (useExhibit 3-4as a guide).