Job Order Costing In Action Christian Wolfl Enterprises Christian Wolf Enterprises keeps several artists and interns on staff to create special made to order blown glass artwork for high income clients. The company operates on a calendar year and uses job order costing since each job is unique. The company uses a plantwide predetermined overhead rate of 150% of direct labor costs. ACTION REQUIRED: PREPARE THE JOURNAL ENTRIES FOR EACH BELOW a. Record the journal entry for the materials issued; Update Job Cost Sheet (round to the nearest cent) Review the materials requisitioned (below) for the new product you have been commissioned to make for the Jano family. Desciption Units Requisitioned Unit Cost Total Silicon dioxide 35 8 280 Alumina 1 10 10 Magnesia 2 12 24 Boron oxide 0.5 19 9.50 Lead oxide 0.75 25 18.75 Soda 0.1 20 2 Lime 0.15 21 3.15 Cobalt 0 22 - Silver 0.31 35 10.85 Copper 0.1 28 2.80 Manganese 0.05 18 0.90 Chorium 0.03 25 0.75 362.70 b. Assume you worked all week on this one product. An analysis of Time Cards for the Employees showed the following: Direct Laborer (you) assume 40 hours @ $25 per hour Supervisor $45,000 annual salary (break this down into $870 per week) Assume FICA rates are 6.2% + 1.45% = 7.65% and Employee Income Tax Withholding is at 10% of wages. Assume FUTA and SUTA rates of 4% and 1% respectively on the first $10,000 of wages. Action Items: Record the journal entry for the wages; Update Job Cost Sheet (round to the nearest cent) c. Other Miscellaneous activities includes: Paid Utilities on the factory building of $2,000 Monthly depreciation on plant assets were calculated. On an annual basis, the company writes off (rounded to the nearest dollar): Factory buildings $2,500 Machinery and Equipment $7,100 Office Equipment $12,000 Adjust the balance of the prepaid insurance account, which represents a two-year premium for a fire insurance policy covering the factory building and machinery. It was paid on the last day of the preceding month and became effective on October 1. (Round your journal entry to the nearest dollar.) Action Items:Record the journal entry for each of the above d.Calculate the applied overhead for each job. Record the journal entry. Update Job Cost Sheet. Record the journal entry for the job you completed (the Catt Family Project). Action Items:Record the journal entry for each of the above e. Jobs Jones and Xiong were delivered to customers during the month. Sale price is 50% markup over cost. Action Items:Record the journal entry for each of the above Additional Information: USE EXHIBIT 1 TO UPDATE JOB COST SHEET EXHIBIT 1. POST-CLOSING TRIAL BALANCE Cash 5,795 Accounts Receivable 50,000 Finished Goods 29,000 Work in Process - Prepaid Insurance 7,200 Building 100,000 Machinery and Equipment 50,000 Office Equipment 60,000 Accumulated Depreciation 137,000 Accounts Payable 10,000 FICA Tax Payable 3,000 FUTA and SUTA Payable 300 Employee Income Tax Payable 5,000 Capital Stock 50,000 Retained Earnings 114,090 319,390 319,390 Exhibit 2 shows subsidiary ledgers for the Finished Goods Account (a piece for the Jones family and a piece for the Xiong family). You are also given detail of the Materials accounts. EXHIBIT 2 FINISHED GOODS INVENTORY Jones Piece Xiong Piece Total Direct Materials 5000 10,000 15,000 Direct Labor 3000 7000 10,000 Factory Overhead 1000 3000 4000 9000 20,000 29,000 Direct Materials Inventory Description Units Unit Cost Total Silicon Dioxide 1499 8 11,992 Alumina 150 10 1,500 Magnesia 150 12 1,800 Boron oxide 60 19 1,140 Lead oxide 25 25 625 Soda 2 20 40 Lime 2 21 42 Cobalt 2 22 44 Silver 2 35 70 Copper 2 28 56 Manganese 2 18 36 Chorium 2 25 50 17,395