Problem 15-1A Lott Company uses a job order cost system and applies overhead to
ID: 2601008 • Letter: P
Question
Problem 15-1A Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $21,600, direct labor $12,960, and manufacturing overhead $17,280. As of January 1, Job No. 49 had been completed at a cost of $97,200 and was part of finished goods inventory. There was a $16,200 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $131,760 and $170,640, respectively. The following additional events occurred during the month. Purchased additional raw materials of $97,200 on account. Incurred factory labor costs of $75,600. Of this amount $17,280 related to employer payroll taxes. Incurred manufacturing overhead costs as follows: indirect materials $18,360; indirect labor $21,600; depreciation expense on equipment $12,960; and various other manufacturing overhead costs on account $17,280. Assigned direct materials and direct labor to jobs as follows. 1. 2. 3. 4. Job No. 50 51 52 Direct Materials Direct Labor $10,800 42,120 32,400 $5,400 27,000 21,600Explanation / Answer
Job Cost Sheets :
Journal Entries :
Contd.
Completion of Jobs:
To record sale of jobs:
Balance of Finished Goods Inventory at the end of the month:
Manufacturing Overheads:
Job 50 Job 51 Job 52 Total Beginning Work in Process Direct Materials 21,600 Direct Labor 12,960 Manufacturing Overheads 17,280 51,840 0 0 51,840 Additions during the period Direct Materials 10,800 42,120 32,400 85,320 Direct Labor 5,400 27,000 21,600 54,000 Manufacturing Overheads 7,200 36,000 28,800 72,000 Manufacturing Costs during the period 23,400 105,120 82,800 211,320 Completed and Transferred out (75,240) (105,120) 0 (180,360) Ending Work in Process 0 0 82,800 82,800