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Liliana Richmond started KidCo, Inc. in Albuquerque, New Mexico to produce affordable childrens furnishings. The company uses a job-order costing system. KidCos work-in-process inventory at

Liliana Richmond started KidCo, Inc. in Albuquerque, New Mexico to produce affordable childrens furnishings. The company uses a job-order costing system. KidCos work-in-process inventory at the end of November consisted of the following jobs .

Job No. Description Units Accumulated Cost
CBS102 Cribs 20,000 $ 900,000
PLP086 Playpens 15,000 416,000
DRS114 Dressers 25,000 250,000
Total $ 1,566,000

The companys November 30 finished-goods inventory, which is valued using the FIFO (first-in, first-out) method, consisted of five items.

Item Quantity and Unit Cost Accumulated Cost
Cribs 7,500 units @ $64 each $ 480,000
Strollers 13,000 units @ $23 each $ 299,000
Carriages 11,200 units @ $102 each 1,142,400
Dressers 21,000 units @ $55 each 1,155,000
Playpens 19,400 units @ $35 each 679,000
Total $ 3,755,400

KidCo applies manufacturing overhead on the basis of direct-labor hours. The companys overhead budget for the year totals $4,500,000. The company plans to use 900,000 direct-labor hours during this period, which is the firms estimated practical capacity. Through the first 11 months of the year, a total of 831,000 direct-labor hours were worked, and total overhead amounted to $4,139,000.

At the end of November, the balance in KidCos Raw-Material Inventory account, which includes both raw material and purchased parts, was $668,000. Additions to inventory and requisitions from inventory during December included the following.

Purchases Raw Material Purchased Parts
Purchases $ 242,000 $ 396,000
Requisitions:
Job CBS102 51,000 104,000
Job PLP086 3,000 10,800
Job DRS114 125,000 88,000
Job STR077 (10,000 strollers) 62,000 81,000
Job CRG098 (5,000 carriages) 65,000 187,000

During December, KidCos factory payroll consisted of the following:

CBS102 12,000 hr $ 122,400
PLP086 4,400 hr 43,200
DRS114 19,500 hr 200,500
STR077 3,500 hr 30,000
CRG098 14,000 hr 138,000
Indirect labor 3,000 hr 29,400
Supervision 57,600
Total 49,900 $ 621,100

The following list shows the jobs that were completed and the unit sales for December.

Production

Sales

Job No. Items Quantity Completed Item Quantity Shipped
CBS102 Cribs 20,000 Cribs 17,500
PLP086 Playpens 15,000 Playpens 21,100
STR077 Strollers 10,000 Strollers 14,000
CRG098 Carriages 5,000 Dressers 18,000
Carriages 6,000

1.

value: 1.00 points

Required information

Required:
1. Choose when it is appropriate for a company to use a job-order costing system.

A job order costing system is appropriate in any environment where costs can be readily identified with specific products, batches, contracts, or projects.

A job order costing system is appropriate in any environment where the costs are unidentifiable with specific products, batches, contracts, or projects.

2.

value: 3.00 points

Required information

2.

Calculate the dollar balance in KidCos Work-in-Process Inventory account as of December 31.

3.

value: 3.00 points

Required information

3.

Calculate the dollar amount related to the playpens in KidCos Finished-Goods Inventory account as of December 31.

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