Lu Technology Co. manufactures DVDs for computer software and entertainment companies. Lu uses job order costing. On June 2,Lu began production of 5,800 DVDs, Job 423, for Portrait Pictures for $1.20 sales price per DVD. Lu promised to deliver the DVDs to Portrait Pictures by June 5. Lu incurred the following direct costs:

Data table:

Date	Labor Time Record No.	Description	Amount
6/02	655	10 hours @ $14 per hour		$140
6/03	656	20 hours @ $13 per hour		260

	Materials
	Requisition
Date	No.	Description	Amount
6/02	63	31 lbs. polycarbonate plastic @ $12 per lb.	$372
6/02	64	25 lbs. acrylic plastic @ $27 per lb.	675
6/03	74	3 lbs. refined aluminum @ $48 per lb.	144

more info:

LuTechnology allocates manufacturing overhead to jobs based on the relation between estimated overhead of $550,000 and estimated direct labor costs of $440,000. Job 423 was completed and shipped on June 3.

Requirement 1. Prepare a job cost record for Job 423. Calculate the predetermined overhead allocation rate (round to two decimal places); then allocate manufacturing overhead to the job.

Begin by determining the total amount of direct materials and direct labor incurred on the job. Next, calculate the predetermined overhead allocation rate and apply manufacturing overhead to the job. Lastly, compute the total cost of Job 423 and the cost per DVD.

Job Cost Record
Job No.	423
Customer Name		Portrait
Job Description		5,800 DVDs
Date Promised 6-5
	Direct materials
	Requisition
Date	Number	Amount
62	63	$372
62	64	675
63	74	144
Totals

Date Started 6-2
Direct labor
Labor Time
Record
Number	Amount
655	$140
656	260

Date Completed 6-3
Manufacturing overhead allocated
Date	Rate		Amount
63		of direct
	labor cost
Overall Cost Summary
Direct materials
Direct labor
Manufacturing overhead
Allocated
Total Job Cost
Cost per DVD

Requirement 2. Journalize in summary form the requisition of direct materials and the assignment of direct labor and the allocation of manufacturing overhead to Job 423. Wages are not yet paid. (Record debits first, then credits. Exclude explanations from any journal entries.)

Start by journalizing the use of direct materials.

Date			Accounts	Debit	Credit
Jun. 3			Work-in-Process Inventory
			Raw Materials inventory

Next, journalize the use of direct labor.

Date			Accounts	Debit	Credit
Jun. 3

Now journalize the allocation of overhead to Job 423.

Date			Accounts	Debit	Credit
Jun. 3

Requirement 3. Journalize completion of the job and the sale of the 5,800

DVDs on account. (Record debits first, then credits. Exclude explanations from any journal entries.)

Begin by preparing the entry to show the completion of the job.

Date			Accounts	Debit	Credit
Jun. 3

Next, journalize the revenue portion of the sale of Job 423.

Date			Accounts	Debit	Credit
Jun. 3

Finally, journalize the cost of goods portion of the sale.

Date			Accounts	Debit	Credit
Jun. 3

and,

Princeton Computer Company uses a job order costing system in which each batch manufactured is a different job. Princeton Computer Company assigns direct materials and direct labor to each job. The company assigns labor costs at $26 per hour. It allocates manufacturing overhead to jobs based on a predetermined overhead allocationrate, computed as a percentage of direct labor costs. At the beginning of 2020, the controller prepared the followingbudget:

Manufacturing overhead	$180,000
Direct labor costs	$900,000

In November 2020, PrincetonComputer Company worked on several jobs. Records for two jobs appear here:

	Job 721		Job 722
Direct labor hours	790	hours	120	hours
Direct materials	$20,600		$1,900

1.	Compute Princeton Computer Company's predetermined overhead allocation rate for 2020.
2.	Compute the total cost of each job.
3.	Why does Princeton assign costs to jobs?