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September 3, 2015

Homework Help: accounting

Posted by chunky on Wednesday, January 18, 2012 at 2:18pm.

Inventory Accounts and Cost of Goods Sold [LO 6] Smith Die Company manufactures cutting dies for the shoe industry. Each set of dies is custom designed to a customer’s templates. During the first week of May, six orders were received from customers. They were assigned job numbers 1005 to 1010. The following transactions occurred during the first week of May:

Smith Die purchased steel on account from Eastern City Steel costing $5,000. The company received and paid for supplies (indirect materials) from Mallard Supply costing $2,300.

Material requisitions indicated that materials were issued to the factory floor as follows:

Job No.

Direct Materials

Indirect Materials

1005

$  600

 

1006

   800

 

1007

 1,500

 

1008

   600

 

1009

   400

 

1010

  300

    

Totals

 $4,200

$800

The labor time ticket summary reflected the following costs for the week:

Job No.

Direct Labor

Indirect Labor

1005

$1,500

 

1006

 1,900

 

1007

 3,200

 

1008

 1,300

 

1009

   800

 

1010

   600

     

Totals

$9,300

$6,400

Overhead was applied to all jobs in process at 180 percent of direct labor cost. Jobs 1005, 1006, 1007, and 1008 were completed and transferred to finished goods. Jobs 1009 and 1010 were still in process at the end of the week. Jobs 1005, 1006, 1007, and 1008 were shipped to customers and billed at 150 percent of total job cost.

Required

a. Calculate the total cost of each job.

b. Prepare journal entries to record the above information.
(Managerial Accounting, 4th Edition. John Wiley & Sons pp. 72 - 73).
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