ADMS 3510 Lecture Notes - Subledger, Finished Good

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raspberryantelope879

2 May 2013

School

York University

Department

Administrative Studies

Course

ADMS 3510

Professor

Rebecca Jubis

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Document Summary

Journal entry 4: to assign materials to jobs and overhead. Example: if ,000 of direct materials and ,000 of indirect materials are. Factory labour costs assigned when the work is performed charged, and the total labour cost. Factory labour costs are assigned to jobs on the basis of time tickets prepared. The time ticket indicates the employee, the hours worked, the account and job to be. The work in process inventory account is debited for direct labour, and manufacturing overheadis debited for indirect labour. Journal entry 5: to assign labour to jobs and overhead. Example: if the ,000 total factory labour cost incurred consists of ,000 of direct labour and ,000 of indirect labour, the entry is: Manufacturing overhead is assigned to work in process and to specific jobs on an estimated basisthrough the use of a predetermined overhead rate. Using a predetermined overhead rate enables a cost to be determined for a job immediately.

Related Questions

Yu Technology Co. manufactures CDs and DVDs for computer software and entertainment companies. Yu uses job order costing and has a perpetual inventory system. The business has a highly labour intensive production process, so it applies manufacturing overhead to jobs based on direct labour cost. Yu expects to incur $1,080,000 0f manufacturing overhead costs and estimated direct labour costs of $900,000 during 2015. At the end of March 2015,

Yu Technology reported work in process inventory of $15,000

During April 2015, Yu Technology recorded the following transactions.

1) Materials requisitioned for use in production:

Direct materials: $120,000

Indirect materials: $20,000

2) Advertising costs were incurred, $15,000.

3) Salaries and wages incurred as follows:

Direct labour $121,875

Indirect labour $40,625

Selling and administrative salaries $ 25,000

4) Insurance expired during the year, $30,000 (90% relates to the factory, the remainder is on selling and administrative items).

5) Depreciation recorded for the year, $80,000 (75% relates to factory assets and the remainder relates to selling and administrative assets).

6) Utilities expense incurred, $53,750 (80% of this amount relates to the factory, the remainder relates to the administrative offices).

7) Applied manufacturing overhead costs to jobs

8) Two jobs were completed with total costs of $120,000 & $85,000 respectively. They were sold on account at a mark-up of 75% on cost.

All purchases and services were acquired on account.

(d) Record a journal entry to close manufacturing overhead to cost of goods sold.
(e) Prepare an income statement for the year
(f) Determine the balance in work in process inventory on April 30.

ultramarineclam743

Yu Technology reported work in process inventory of $15,000

During April 2015, Yu Technology recorded the following transactions.

1) Materials requisitioned for use in production:

Direct materials: $120,000

Indirect materials: $20,000

2) Advertising costs were incurred, $15,000.

3) Salaries and wages incurred as follows:

Direct labour $121,875

Indirect labour $40,625

Selling and administrative salaries $ 25,000

4) Insurance expired during the year, $30,000 (90% relates to the factory, the remainder is on selling and administrative items).

5) Depreciation recorded for the year, $80,000 (75% relates to factory assets and the remainder relates to selling and administrative assets).

6) Utilities expense incurred, $53,750 (80% of this amount relates to the factory, the remainder relates to the administrative offices).

7) Applied manufacturing overhead costs to jobs

8) Two jobs were completed with total costs of $120,000 & $85,000 respectively. They were sold on account at a mark-up of 75% on cost.

All purchases and services were acquired on account.

1. State the journal entries necessary to record the above transactions in the general journal.

2. Is manufacturing overhead over-applied or under-applied? By how much?

3. Record a journal entry to close manufacturing overhead to cost of goods sold.

whitewhale369

Case 3-49

Avid Assemblers uses normal job-order costing to assign costs toproducts. The company assembles and packages 25 different productsaccording to customer specifications. Products are worked on inbatches of 20 to 40 units. Each batch is given a job number. OnOctober 1, the company had the following balances:

Raw materials		$9,800
Work in process		65,847
Finished goods		30,640

Work in process consisted of the following jobs:

	Job 22	Job 24	Job 25
Direct materials	$6,200	$5,190	$4,800
Direct labour	10,500	9,210	9,500
Applied overhead	7,350	6,447	6,650
Total	$24,050	$20,847	$20,950
Number of units	20	40	30

Finished goods consisted of Job 23, with the following costs:

		Job 23
Direct materials		$8,200
Direct labour		13,200
Applied overhead		9,240
Total		$30,640
Number of units		50

Shown below are the direct cost data related to jobs started inOctober:

	Job 26	Job 27	Job 28	Total
Direct materials	$5,180	$5,600	$4,200	$14,980
Direct labour	11,200	9,340	5,910	26,450
Number of units	20	30	20

Other information:

Direct materials and direct labour added tobeginning work in process in October were as follows:

	Job 22	Job 24	Job 25	Total
Direct materials	$1,150	$610	$1,500	$3,260
Direct labour	3,000	4,500	5,500	$13,000

Overhead is applied at a predetermined rate basedon the direct labour cost.

Actual expenses for October were as follows:

Supervisory salaries	$6,000	Supplies (factory)	$2,100
Factory rent	5,000	Selling expenses	8,500
Depreciation (machines)	5,000	Property tax and insurance	2,250
Indirect labour	4,000	CPP, EI, and other benefits*	4,200