raw materials inventory|My homework helper

Exercise A – Chapter 4 Job Order Costing

EA1.

LO 4.1Little Things manufactures toys. For each item listed, identify whether it is a product

cost, a period cost, or not an expense.

A. internet provider services

B. material expense

C. raw materials inventory

D. production equipment rental

E. showroom rental

F. factory employee salary

G. Human Resource Director salary

EA2.

LO 4.2Table 4.3 shows a list of expenses involved in the production of custom, professional

lacrosse sticks.

A. For each item listed, state whether the cost should be applied to manufacturing or sales

and administration.

B. If the cost is a manufacturing cost, state whether it is direct materials, direct labor, or

manufacturing overhead.

C. If the cost is a manufacturing overhead cost, state whether it is indirect materials, indirect

labor, or another type of manufacturing overhead.

Expenses Involved in Lacrosse Stick Production

Lacrosse Stick

Production Costs

Manufacturing or Sales

& Administration Cost?

If Manufacturing: Direct

Materials, Direct Labor, or

Overhead?

If Overhead: Indirect

Materials, Indirect

Labor, or Other?

Carbon, fiberglass

Administrative

building rent

Accountant salary

Factory building

depreciation

Strings for the

pocket

Advertising

Exercise A – Chapter 4 Job Order Costing

Lacrosse Stick

Production Costs

Manufacturing or Sales

& Administration Cost?

If Manufacturing: Direct

Materials, Direct Labor, or

Overhead?

If Overhead: Indirect

Materials, Indirect

Labor, or Other?

Production

supervisor salary

Paint for sticks

Research and

development costs

Wages of person

who strings the

sticks

Cutting machine

depreciation

Human resources

salaries

Factory maintenance

Table4.3

EA3.

LO 4.2Burnham Industries incurs these costs for the month:

A. What is the prime cost?

B. What is the conversion cost?

EA4.

Exercise A – Chapter 4 Job Order Costing

LO 4.3Marzoni’s records show raw materials inventory had a beginning balance of $200 and an

ending balance of $300. If the cost of materials used during the month was $900, what were the

purchases made during the month?

EA5.

LO 4.3Sterling’s records show the work in process inventory had a beginning balance of $4,000

and an ending balance of $3,000. How much direct labor was incurred if the records also show:

EA6.

LO 4.3Logo Gear purchased $2,250 worth of merchandise during the month, and its monthly

income statement shows cost of goods sold of $2,000. What was the beginning inventory if the

ending inventory was $1,000?

EA7.

LO 4.4A company estimates its manufacturing overhead will be $750,000 for the next year.

What is the predetermined overhead rate given the following independent allocation bases?

A. Budgeted direct labor hours: 60,000

B. Budgeted direct labor expense: $1,500,000

C. Estimated machine hours: 100,000

EA8.

LO 4.4Job order cost sheets show the following costs assigned to each job:

The company assigns overhead at $1.25 for each direct labor dollar spent. What is the total cost

for each of the jobs?

Exercise A – Chapter 4 Job Order Costing

EA9.

LO 4.4A new company started production. Job 10 was completed, and Job 20 remains in

production. Here is the information from job cost sheets from their first and only jobs so far:

Using the information provided,

A. What is the balance in work in process?

B. What is the balance in the finished goods inventory?

C. If manufacturing overhead is applied on the basis of direct labor hours, what is the

predetermined overhead rate?

EA10.

LO 4.5K company production was working on Job 1 and Job 2 during the month. Of the $780 in

direct materials, $375 in materials was requested for Job 1. Direct labor cost, including payroll

taxes, are $23 per hour, and employees worked 18 hours on Job 1 and 29 hours on Job 2.

Overhead is applied at the rate of $20 per direct labor hours. Prepare job order cost sheets for

each job.

EA11.

LO 4.7A company has the following transactions during the week.

• Purchase of $1,000 raw materials inventory

• Assignment of $500 of raw materials inventory to Job 5

• Payroll for 20 hours with $1,000 assigned to Job 5

• Factory utility bills of $750

• Overhead applied at the rate of $10 per hour

What is the cost assigned to Job 5 at the end of the week?

EA12.

LO 4.7During the month, Job AB2 used specialized machinery for 450 hours and incurred $500

in utilities on account, $300 in factory depreciation expense, and $100 in property tax on the

factory. Prepare journal entries for the following:

A. Record the expenses incurred.

Exercise A – Chapter 4 Job Order Costing

B. Record the allocation of overhead at the predetermined rate of $1.50 per machine hour.

EA13.

LO 4.7Job 113 was completed at a cost of $5,000, and Job 85 was completed at a cost of $3,000

and sold on account for $4,500. Prepare journal entries for the following:

A. Completion of Job 113.

B. Completion and sale of Job 85.

EA14.

LO 4.7A company’s individual job sheets show these costs:

Overhead is applied at 1.25 times the direct labor cost. Use the data on the cost sheets to perform

these tasks:

A. Apply overhead to each of the jobs.

B. Prepare an entry to record the assignment of direct materials to work in process.

C. Prepare an entry to record the assignment of direct labor to work in process.

D. Prepare an entry to record the assignment of manufacturing overhead to work in process.

EA15.

LO 4.7A summary of material requisition slips and time tickets, along with the overhead

allocation, show these costs:

Exercise A – Chapter 4 Job Order Costing

A. Prepare an entry to record the assignment of direct material to work in process.

B. Prepare an entry to record the assignment of direct labor to work in process.

C. Prepare an entry to record the assignment of manufacturing overhead to work in process.