Job Order Costing In Action

The company uses a plantwide predetermined overhead rate of 150% of direct labor costs.

1. Calculate the applied overhead for each job. Record the journal entry. Record the journal entry for the job you completed (the Catt Family Project). Action Items:Record the journal entry for each of the above

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

2. 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.

Required: Calculate and record the journal entry for the wages

3. Calculate the Other Miscellaneous activities includes:

a. Paid Utilities on the factory building of $2,000

b. 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

Required: Record the journal entry.