Question
Solve the following exercise, using the Job Order Costing System, accounting for the following operations. Determine the unit cost of the finished production, the value
Solve the following exercise, using the Job Order Costing System, accounting for the following operations. Determine the unit cost of the finished production, the value of the production in process and the Statement of Cost of Production and Sales.
The industrial company Juguetera, S.A. de C.V. has implemented a Historical Cost System by production orders, starts its production period, considering the following:
a) The items to be manufactured are balls and spinning tops.
b) At the beginning of the period, order No. 100 for 230 units of ball bearings enters production.
c) During the period orders No. 101 for 1,500 units of spinning tops, No. 102 for 1,350 units of ball bearings, No. 103 for 900 units of spinning tops were processed.
1. Account balances at the beginning of the period:
Raw material warehouse: Material "A" 15,000 Kg at $5.00 Material "B" 7,000 Kg at $ 8.00
Indirect materials warehouse: $ 15,000.00
Production in process (Initial inventory): order No.100 for 230 units of bearings [raw material $22,750.00, labor $4,850.00 and indirect costs $7,325.00.
2. operations for the month:
a) Purchases:
Purchase of raw material on credit: Type "A" 25,500 Kg at $5.50 and Type "B" 20,250 Kg at $7.50.
Purchase of indirect materials on credit: $ 40,000.00
b) Raw material consumption:
Order No. 100: material "A" 2,000 Kg at $5.50 and material "B" 1,100 Kg at $7.50.
Order No. 101: material "A" 10,000 Kg at $5.50 and material "B" 6,000 Kg at $7.50.
Order No. 102: material "A" 9,900 Kg at $5.50 and material "B" 6,120 Kg at $7.50.
Order No. 103: material "A" 3,100 Kg at $5.50 and material "B" 3,200Kg at $6.50.
c) Wages for the period $95,800.00
d) Application of wages to production: Order No. 100: 620 Hrs. at $4.00, Order No. 101: 5,150 Hrs. at $4.00, Order No. 102: 4,150 Hrs. at $4.00 and Order No. 103: 1,920 Hrs. at $4.00, Order No. 103: 1,960 Hrs. at $4.00 and Order No. 103: 1,960 Hrs. at $4.00.
Order No. 103: 1,930 Hrs. at $4.00.
e) Indirect Costs
Materials: $31,753.00, Depreciation and amortization $6,159.00. Fuels, repairs, etc. $18,589.00.
3. Orders number 100, 101 and 102 were completed, and order No. 103 is in process.
Order 100 and 86% of order 101 are sold, with 72% over production cost.
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