Job costing system question. Please see my question and deadline before contact me!

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TheClashCompanyusesjob-ordercosting.  Costsarechargedtojobsusingnormalcosting,and overheadisbasedondirectlaborcost   Estimateddirectlaborcostfor2014is$60,000,andthe estimatedoverheadcostfor2014is$72,000.  ThebeginningbalanceinMaterialsControlwas

$4,500.  TheMaterialsControlaccountonlyincludesdirectmaterials.  Directmaterials

purchasedduring2014were$40,000.  ThebeginningWorkinProcessfor2014includedcost from2jobs,Job111andJob222.  TheJob111costinbeginningWorkinProcesswas$3,000, whichincluded$1,000fordirectmaterials,$1,000fordirectlabor,and$1,000forallocated overhead.  TheJob222costinbeginningWorkinProcesswas $5,000,whichincluded$1,000 fordirectmaterials,$2,000fordirectlabor,and$2,000ofallocatedoverhead.  Duringthe previousyear,allunderallocatedoroverallocatedoverheadhadbeenchargedtotallytoCostof GoodsSold.  ThebeginningbalanceinFinishedGoodsfor2014included50unitsfromJob104, withacostof$80perunit.  Of the total amount of $80 per unit, $20 per unit was overhead cost.  Thedirectcostschargedtojobsduring2014areasfollows:

 

 

Job111         

     Job 222                  

Job 333

 

   Job 444  

        Job 555

DirectMaterials

$  7,000

$  9,000

$11,000

 

$13,000

$   2,000

DirectLabor

$10,000

$11,250

$15,000

 

$20,000

$   6,250

 

Unitsonjob                1,000units     100units        400units        500units    not applicable

 

Thecompanyallocates(prorates)anyunderallocatedoroverallocatedoverheadtotheappropriate accountsattheendoftheyear,usingthemosttheoreticallycorrectmethod.  Actualoverheadfor

2014was$70,000.  Duringtheyear,alljobswerecompletedexceptJob555.  At the end of 2014, there were 375 units from Job 444 in Finished Goods.  All other units that had been in Finished Goods during 2014 had been sold.

 

 

1.     Compute the underallocated or overallocated overhead and prorateit to the appropriate accounts inthemosttheoreticallycorrectway.  Roundpercentagestothenearestpercent,andround totalamountstothenearestdollar,ifneeded.

 

 

2.  Ifthecompanyhadusedactualcostingbasedonayear'stimeframe,whatwouldthe actual overheadratehavebeen?  Whatwouldhavebeenthetotalbalance (DM + DL + OH) inendingWork inProcessifthecompanyhadusedactualcosting?   Nowgobacktonormalcostingand computethecorrectedbalanceofWorkinProcessafteryourcomputationsinnumber1.  ArethetwobalancesinWorkinProcess(actualvs. correctednormal)thesame?Shouldthey bethesame?

 

Please note that you may have been given a lot of information on this quiz that you don’t really need to answer the required questions.  You need to be able to figure out what is relevant and what isn’t.

Thisquizis worth 5 points and is due nextMonday,March 2nd, at 4:30 in the afternoon.  PLEASE remember that take-home quizzes are open book and open notes, but NOT open neighbor.  Do your own work on this quiz.

  • Posted: 5 years ago
  • Due: 
  • Budget: $20
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