P4 46 Value Premium performs market research for consumer product companies across the country The company conducts telephone surveys and gathers consumers together in focus groups to review foods, cleaning products, and toiletries Value Premium uses a normal costing system with one direct cost pool, labor, and one indirect cost pool, general overhead General overhead is allocated to each job based on 140 of direct labor cost Actual overhead equaled allocated overhead as of April 30, 2017 Actual overhead in May was $ 105,600 Requirements 1 Calculate JIP at the end of MayMay 2 Calculate CCJ for MayMay 3 Calculate under or overallocated overhead at the end of MayMay 4 Calculate the ending balances in JIP and CCJ if the under or overallocated overhead amount is as follows a Written off to CCJ b Prorated based on the ending balances (before proration) in JIP and CCJ c Prorated based on the overhead allocated in MayMay in the ending balances of JIP and CCJ (before proration) 5 Which method would you choose Explain Would your choice depend on whether overhead cost is underallocated or overallocated Explain Requirement 1 Calculate JIP at the end of May Balance at the Job end of May Total Choose from any list or enter any number in the input fields and then click Check Answer More Info All costs incurred during the planning stage for a market research job and during the job are gathered in a balance sheet account called Jobs in Progress (JIP) When a job is completed, the costs are transferred to an income statement account called Cost of Completed Jobs (CCJ) Requirement 2 Calculate CCJ for May Balance at the Job end of May Total From Beginning JIP Incurred in May General Overhead Band Labor Allocated Labor Nibble Candy Bars $45,280 $25,000 $13,000 Blaze Toothpaste 31,120 7,000 31,000 Rojo Organic Salsa 21,600 Glow Dish Liquid 5,900 As of May 1, there were two jobs in progress Nibble Candy Bars, and Blaze Toothpaste The jobs for Rojo Organic Salsa and Glow Dish Liquid were started during May The jobs for Nibble Candy Bars and Glow Dish Liquid were completed during May

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P4-46 Value Premium performs market research for consumer product companies across the country. The company conducts telephone surveys and gathers consumers together in focus groups

P4-46

Value Premium performs market research for consumer product companies across the country. The company conducts telephone surveys and gathers consumers together in focus groups to review foods, cleaning products, and toiletries. Value Premium uses a normal-costing system with one direct-cost pool, labor, and one indirect-cost pool, general overhead. General overhead is allocated to each job based on 140% of direct labor cost. Actual overhead equaled allocated overhead as of April 30, 2017. Actual overhead in May was $ 105,600.

Requirements

1.	Calculate JIP at the end of MayMay.
2.	Calculate CCJ for MayMay.
3.	Calculate under- or overallocated overhead at the end of MayMay.
4.	Calculate the ending balances in JIP and CCJ if the under- or overallocated overhead amount is as follows:
	a.	Written off to CCJ
	b.	Prorated based on the ending balances (before proration) in JIP and CCJ
	c.	Prorated based on the overhead allocated in MayMay in the ending balances of JIP and CCJ (before proration)
5.	Which method would you choose? Explain. Would your choice depend on whether overhead cost is underallocated or overallocated? Explain.

Requirement 1. Calculate JIP at the end of May.

	Balance at the
Job	end of May


Total

Choose from any list or enter any number in the input fields and then click Check Answer.

More Info

All costs incurred during the planning stage for a market research job and during the job are gathered in a balance sheet account called "Jobs in Progress (JIP)." When a job is completed, the costs are transferred to an income statement account called "Cost of Completed Jobs (CCJ)."

Requirement 2. Calculate CCJ for May.

	Balance at the
Job	end of May


Total

	From Beginning JIP		Incurred in May
		General
		Overhead
Band	Labor	Allocated	Labor
Nibble Candy Bars	$45,280	$25,000	$13,000
Blaze Toothpaste	31,120	7,000	31,000
Rojo Organic Salsa	-	-	21,600
Glow Dish Liquid	-	-	5,900

As of May 1, there were two jobs in progress: Nibble Candy Bars, and Blaze Toothpaste. The jobs for Rojo Organic Salsa and Glow Dish Liquid were started during May. The jobs for Nibble Candy Bars and Glow Dish Liquid were completed during May.