1. Government Slice, Inc. (GSI), designs and builds municipal golf courses. A course the company was working on was just finished in December of the year just ended, 2019, for a city named Burkitt, and the company is figuring out the cost of the job (using a job order costing system). The company just began a new job for the town of Sharpsburg, late in December, but mostly the designers and gardeners have been involved, as only $ 27,000 of direct materials have been used for the Sharpsburg job so far. The direct materials for a job consists mostly of sand, grass and turf, and shrubs or trees, and there are no indirect materials accounted for. The direct labor cost is based on gardeners hours spent on a job, at a rate of $ 32 per hour. The manufacturing overhead for the company relates to the designing work costs, and is applied to jobs (for each customer) based on the number of designer hours per job (customer). The total years manufacturing overhead budget was $420,000. and the estimated total designer hours to be spent during the year was 7,000 hours. Calculate the predetermined overhead rate per designer hour, and apply manufacturing overhead to the Burkitt job, given the information below. The client (the town of Burkitt) was quoted a total price of $2,500,000. for the entire job, and thus was billed that amount.

The Inventory balances were as follows:

Direct Materials (sand, turf, trees) Work in Process

Beginning balance 1/1/2019 Beginning balance 1/1/2019

$ 73,000 $ 290,000 (Burkitt job)

Ending balance 12/31/2019 Ending balance 12/31/2019

$ 67,000 $ 116,000 (Sharpsburg job)

Purchases of Direct Materials during 2019 amounted to $ 742,000. Direct Labor hours for the Burkitt job were 19,300 hours during 2019, and 2,500 hours for the Sharpsburg job in 2019. The designers spent 6,700 hours during the year 2019, related to the Burkitt job just finished, and 150 hours on Sharpsburg.

What was the cost of the Burkitt job and the profit for it?

Since over or under allocated overhead is generally immaterial in amount the total is always closed to costs of jobs completed each year.

$ 426,000 was exactly the amount of designer cost overhead incurred, so, was there an under or over allocated overhead amount? How much? Write up summary journal entries for all the transactions discussed above.

Verify how the $ 116,000 balance was computed for ending work in process.