Sager Company manufactures variations of its product, a technopress, in response to custom orders from its customers. On May 1, the company had no inventories of work in process or finished goods but held the following raw materials.
Material M.................. 200 units @ $250 = $50,000
Material R.................. 95 units @ 180 = 17,100
Paint............................ 55 units @ 75 = 4,125
Total cost................................................. $71,225
On May 4, the company began working on two technopress: Job 102 for Worldwide Company and Job 103 for Reuben Company.
Required
Using Exhibit 19.3 as a guide, prepare job cost sheets for Jobs 102 and 103. Using Exhibit 19.5 as a guide, prepare materials ledger cards for Material M, Material R, and paint. Enter the beginning raw materials inventory dollar amounts for each of these materials on their respective ledger cards. Then, follow the instructions in this list of activities.
AutoSave . Off By ~ Chapter 19 Graded Assignment Problem Worksheet (1) - Excel O Search Seigo Sato SS X File Home Insert Draw Page Layout Formulas Data Review View Help Share Comments Calibri v 12 ~ A A E ab General Insert E Delete "APO Paste LA SEE I V $ ~ % 9 08 08 Conditional Format as Cell Sort & Find & Sensitivity Formatting " Table Styles Format Ideas Filter > Select v Clipboard Font Alignment Number Styles Cells Editing Ideas Sensitivity A1 X v fx Chapter 19 A B C D E F G H K L M N O P Q 19 JOB COST SHEET 20 Customer Name Job Number 103 21 22 Direct Materials Direct Labor Overhead Cost Applied Time Ticket Date 23 Date Requisition Rate Amount Number Amount Number Amount 24 25 26 Summary of Costs 27 Direct Materials 28 Direct Labor 29 Factory Overhead 30 Total cost of Job 31 Status 32 33 Job Cost Sheet Format Sheet1 Journal + 4 - - + 100% O O 3:56 PM 4/5/2020 20AutoSave . Off v Q v Chapter 19 Graded Assignment Problem Worksheet (1) - Excel O Search Seigo Sato SS X File Home Insert Draw Page Layout Formulas Data Review View Help Share Comments 14 A A Insert Calibri General E Delete "APO Paste BIUVULAv I V $ ~ % 9 08 08 Conditional Format as Cell Sort & Find & Ideas Sensitivity Formatting " Table Styles Format Filter > Select v Clipboard Font Alignment Number Styles Cells Editing Ideas Sensitivity A1 X V fx A B C D E F G H K L General Journal IN W Date Transaction Description & Accounts PR Debit Credit A UT 00 10 11 12 13 14 15 16 17 Job Cost Sheet Format Sheet1 Journal + 4 Ready - - + 100% O O 3:57 PM 4/5/2020 20AutoSave . Off By ~ Chapter 19 Graded Assignment Problem Worksheet (1) - Excel O Search Seigo Sato SS X File Home Insert Draw Page Layout Formulas Data Review View Help Share Comments Calibri 12 ~ A" A E ab Insert General E Delete "APO Paste SEE I V $ ~ % 9 08 08 Conditional Format as Cell Sort & Find & Ideas Sensitivity Formatting v Table Styles Format Filter > Select v Clipboard Font Alignment Number Styles Cells Editing Ideas Sensitivity A1 X v fx Chapter 19 A B C D E F G H K L M N O P Q W N JOB COST SHEET Customer Name Job Number 102 O UT Direct Materials Direct Labor Overhead Cost Applied Date Requisition Amount Time Ticket Number Amount Date Rate Amount 7 Number 100 9 10 Summary of Costs 11 Direct Materials 12 Direct Labor 13 Factory Overhead 14 Total cost of Job 15 Status 16 17 Job Cost Sheet Format Sheet1 Journal + - - + 100% O O 3:56 PM 4/5/2020 19on the job are recorded on this sheet. For Job B15, the direct materials and direct labor costs total $600 and $1,000, respectively. Estimated overhead costs are included on job cost sheets, through a process we discuss later in the chapter. For Job B15, estimated overhead Point: Documents (electr costs are $1,600, computed as $1,000 of actual direct labor costs X 160%. When each job is paper) are crucial in a jo system. The job cost she complete, the supervisor enters the completion date and signs the sheet. Managers use job cost cornerstone. It aids in g sheets to monitor costs incurred to date and to predict and control costs for each job. concepts of capitalizing costs and product cost Road Warriors, Los Angeles, California JOB COST SHEET EXHIBIT 19.3 Customer's Name Carroll Connor Job No. B15 Job Cost Sheet Address 1542 High Point Dr. City & State Malibu, California Job Description Level 1 Alarm System on Ford Expedition Date promised March 15 Date started March 3 Date completed March 11 Direct Materials Direct Labor Overhead Date Requisition Cost Date Time Ticket Cost Date Rate Cost 3/3/2019 R-4698 $ 100 3/3/2019 L-3393 $ 120 3/11/2019 160% of $1,600 3/7/2019 R-4705 225 3/4/2019 L-3422 150 Direct 3/9/2019 R-4725 180 3/5/2019 L-3456 180 Labor 3/10/2019 R-4777 95 3/8/2019 L-3479 60 Cost 3/9/2019 L-3501 90 3/10/2019 L-3535 240 3/11/2019 L-3559 160 Total $600 Total | $1,000 Total |$1,600 REMARKS: Completed job on March 11, and shipped to customer SUMMARY: on March 15. Met all specifications and requirements. Materials | $ 600 DM (actual) Labor 1,000 + DL (actual) + FOH (estimated) Overhead 1,600 = Total job cost Signed: C. Luther, Supervisor Total cost | $3,200Exhibit 19.5 shows a materials ledger card for one type of material received and issued by Road Warriors. The card identifies the item as alarm system wiring and shows the item's stock number, its location in the storeroom, information about the maximum and minimum quantities that should be available, and the reorder quantity. For example, two units of alarm system wiring were purchased on March 4, 2019, as evidenced by receiving report C-7117. After this purchase the company has three units of alarm system wiring in inventory. MATERIALS LEDGER CARD LOAD WARRIORS Road Warriors EXHIBIT 19.5 Los Angeles, California Materials Ledger Card Item Alarm system wiring Stock No. M-347 Location in Storeroom Bin 137 Maximum quantity 5 units Minimum quantity 1 unit Quantity to reorder 2 units Received Issued Balance Receiving Requi- Report Unit Total sition Unit Total Unit Total Date Number Units Price Price Number Units Price Price Units Price Price $225 $225 3/4/2019 C-7117 2 $225 $450 R-4705 1 $225 N W 225 675 3/7/2019 $225 225 450 When materials are needed in production, a production manager prepares a materials req- uisition and sends it to the materials manager. For direct materials, the requisition shows the job number, the type of material, the quantity needed, and the production manager's signature. Exhibit 19.6 shows the materials requisition for alarm system wiring for Job B15. For requisi tions of indirect materials, the "Job No." line in the requisition form might read "For General Factory Use." . . . ..... EXHIBIT 19 Road Warriors Los Angeles, California ROAD WARRIOR MATERIALS REQUISITION No. R-4705 Materials Requiem 19-5A Sager Company manufactures variations of its product, a technopress, in response to custom orders tion transactions, its customers. On May 1, the company had no inventories of work in process or finished goods but held ary records, and the following raw materials. documents 2 P3 P4 Material M. ........... . . . .. . .... 200 units @ $250 = $50,000 Material R . . ... . . ........ 95 units @ 180 = 17,100 Paint . .... ....... 55 units @ 75 = 4,125 Total cost. ..... . . . . . . . . .... . .. .. $71,225 On May 4, the company began working on two technopresses: Job 102 for Worldwide Company and Job 103 for Reuben Company. Required Using Exhibit 19.3 as a guide, prepare job cost sheets for Jobs 102 and 103. Using Exhibit 19.5 as a guide, prepare materials ledger cards for Material M, Material R, and paint. Enter the beginning raw materials inventory dollar amounts for each of these materials on their respective ledger cards. Then, follow the instructions in this list of activities. a. Purchased raw materials on credit and recorded the following information from receiving reports and invoices. Receiving Report No. 426, Material M, 250 units at $250 each. Receiving Report No. 427, Material R, 90 units at $180 each. Instructions: Record these purchases with a single journal entry. Enter the receiving report informa- tion on the materials ledger cards. b. Requisitioned the following raw materials for production. Requisition No. 35, for Job 102, 135 units of Material M. Requisition No. 38, for Job 103, 38 units of Material R. Requisition No. 36, for Job 102, 72 units of Material R. Requisition No. 39, for 15 units of paint. Requisition No. 37, for Job 103, 70 units of Material M. Instructions: Enter amounts for direct materials requisitions on the materials ledger cards and the job cost sheets. Enter the indirect materials amount on the materials ledger card. Do not record a journal entry at this time. c. Received the following employee time tickets for work in May. Time tickets Nos. 1 to 10 for direct labor on Job 102, $90,000. Time tickets Nos. 11 to 30 for direct labor on Job 103, $65,000. Time tickets Nos. 31 to 36 for equipment repairs, $19,250. Instructions: Record direct labor from the time tickets on the job cost sheets. Do not record a journal entry at this time. d. Paid cash for the following items during the month: factory payroll, $174,250, and miscellaneous over- head items, $102,000. Use the time tickets to record the total direct and indirect labor costs. Instructions: Record these payments with journal entries. e. Finished Job 102 and transferred it to the warehouse. The company assigns overhead to each job with a predetermined overhead rate equal to 80% of direct labor cost. Instructions: Enter the applied overhead on the cost sheet for Job 102, fill in the cost summary section of the cost sheet, and then mark the cost sheet "Finished." Prepare a journal entry to record the job's completion and its transfer to Finished Goods. f. Delivered Job 102 and accepted the customer's promise to pay $400,000 within 30 days. Instructions: Prepare journal entries to record the sale of Job 102 and the cost of goods sold. g. Applied overhead cost to Job 103 based on the job's direct labor to date. Instructions: Enter overhead on the job cost sheet but do not make a journal entry at this time. Dr. Work in h. Recorded the total direct and indirect materials costs as reported on all the requisitions for the month. entory, $71,050 Instructions: Prepare a journal entry to record these costs. i. Recorded the total overhead costs applied to jobs. Factory $1,625 Cr., Instructions: Prepare a journal entry to record the allocation of these overhead costs. j. Compute the balance in the Factory Overhead account as of the end of May
