Technology Co. manufactures DVDs for computer software and entertainment companies.

TrueTrue

uses job order costing. On

NovemberNovember

2,

TrueTrue

began production of

5 comma 7005,700

DVDs, Job 423, for

DioramaDiorama

Pictures for

$ 1.40$1.40

sales price per DVD.

TrueTrue

promised to deliver the DVDs to

DioramaDiorama

Pictures by

NovemberNovember

5.

TrueTrue

incurred the following direct costs:

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(Click the icon to view additional information.)Read the requirements

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.

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		Diorama
Job Description		5,700 DVDs
Date Promised 11-5
	Direct materials
	Requisition
Date	Number	Amount
112	63	$372
112	64	725
113	74	126
Totals

Date Started 11-2
Direct labor
Labor Time
Record
Number	Amount
655	$160
656	300

Date Completed 11-3

Manufacturing overhead allocated

Date

Rate

Amount

112

120%

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
Nov. 3			Work-in-Process Inventory
			Raw Materials inventory		1,220

Next, journalize the use of direct labor.

Date

Accounts

Debit

Credit

Nov. 3

Work-in-Process Inventory

Wages Payable

Now journalize the allocation of overhead to Job 423.

Date

Accounts

Debit

Credit

Nov. 3

Accounts Receivable

Sales Revenue

Requirement 3. Journalize completion of the job and the sale of the

5 comma 7005,700

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
Nov. 3

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

Date			Accounts	Debit	Credit
Nov. 3

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

Date			Accounts	Debit	Credit
Nov. 3

Data Table

Date	Labor Time Record No.	Description	Amount
11/02	655	10 hours @ $16 per hour		$160
11/03	656	20 hours @ $15 per hour		300

	Materials
	Requisition
Date	No.	Description	Amount
11/02	63	31 lbs. polycarbonate plastic @ $12 per lb.	$372
11/02	64	25 lbs. acrylic plastic @ $29 per lb.	725
11/03	74	3 lbs. refined aluminum @ $42 per lb.	126