Cost accumulation systems

Cost Accounting Chapter 2

Ex 5-5 Job order cost sheet.
i) Prepare journal entries to transfer goods from WIP inventory to Finished Goods inventory.
ii) Record delivery of Job 26 to Dinnerware company.

a) Street Manufacturing Company, General Journal (All amounts in US $)

GENERAL JOURNAL for Job 26 Page 1

Date xxxx Explanation L/R Debit Credit
May. 10 Work in process inventory 1,250
Direct materials inventory 1,250
(Direct materials cost incurred - materials requisitioned)

May 11 Work in process inventory 525

Payroll payable 525
(Direct labour cost incurred)

May 12 Work in process inventory 525

Payroll payable 525
(Direct labour cost incurred)

May 13 Work in process inventory 525

Payroll payable 525
(Direct labour cost incurred)

May 14 Work in process inventory 525

Payroll payable 525
(Direct labour cost incurred)

May 15 Work in process inventory 1,575

Factory overhead - applied 1,575
(Factory Overhead applied)

May 15 Finished goods inventory 4,925

Work in process inventory 4,925
(Transfer of completed goods to finisned goods account)

May 15 Accounts receivable 5,500

Cost of goods sold 4,925
Finished goods inventory 4,925
Sales 5,500
(Delivery of Job 26 to Dinnerware company)

20,275 20,275

Assignment 1
 Cost accumulation systems
Cost Accounting Chapter 2
Ex 5-8 Job order cost sheet
i) Prepare job order cost sheet for Job 453.

HANDY MANUFACTURING
JOB ORDER COST SHEET

CUSTOMER Al's Auto Supply Store JOB NO. 453

PRODUCT Crankshaft DATE ORDERED 27-Apr
QUANTITY Twenty five (25) DATE STARTED 27-Apr
SPECIFICATIONS - DATE WANTED 9-May
SET SIZE Size 4 DATE COMPLETED 3-May

Direct Materials Direct Labour FOH Applied

Date Req No. Amount ($) Date Amount ($) Date Amount ($)
27-Apr 76 3,700.00 27-Apr 99.00 27-Apr 79.20
28-Apr 99.00 28-Apr 79.20
29-Apr 99.00 29-Apr 79.20
30-Apr 117.00 30-Apr 93.60
1-May 148.50 1-May 118.80
Total > 3,700.00 562.50 450.00

----------(All amounts in $)-----------

Selling price ($100 x 25) 2,500.00

Factory costs
Direct materials 3,700.00
Direct labour 562.50
Factory overhead 450.00 4,712.50

Gross profit (2,212.50)

Selling & administrative

expenses 3% of selling price 75.00

Estimated profit/ (loss) (2,287.50)

Assignment 1
 Cost accumulation systems
Cost Accounting Chapter 2
Pr 5-4 Journal entries and WIP inventory

a) Hungary Frozen Food Company, General Journal (All amounts in US $)

GENERAL JOURNAL Page 1
Date xxxx Explanation L/R Debit Credit

June Raw materials inventory 15,000

Accounts payable 15,000
(Direct materials purchased during the period)

June Work in process inventory 8,000

FOH control account - production 3,000
Direct materials inventory 11,000
(Direct and indirect materials requisitioned)

June Work in process inventory 24,000

FOH control account - production 12,000
Payroll payable 36,000
(Direct and indirect labour cost incurred)

June FOH control account - production 42,000

Miscellaneous payable 42,000
(Actual FOH costs incurred)

June Work in process inventory 20,400

FOH applied - production department 20,400
(Applied Factory overhead)

June Fininshed goods inventory 52,000

Work in process inventory 52,000
(Transfer of completed goods to finisned goods account)

June Accounts receivable 98,800

Cost of goods sold 76,000
Finished goods inventory 76,000
Sales 98,800
(Completed jobs sold)

351,200 351,200

(b) WIP inventory on 30 June

Opening balance as on 01 June $12,500
Add: Costs applied during the month
Direct materials 8,000
Direct labour 24,000
FOH applied 20,400 $52,400
Less: Transferred to finished goods $(52,000)
Closing balance as on 30 June $(39,500)

Assignment 1
 Cost accumulation systems
Cost Accounting Chapter 2

(a) PARRISH FERTILIZER COMPANY

CALCULATION OF COST OF PRODUCT
For the year ended 19X3
(All amounts in $)

Direct materials cost:

($300,000 x 75%) 225,000
Direct Labour cost:
($350,000 x 60%) 210,000
Factory overhead cost:
Indirect materials ($300,000 x 25%) 75,000
Indirect labour ($350,000 x 40%) 140,000
Heat, light & power 115,000
Depreciation 78,000
Property taxes 65,000
Repairs & maintenance 42,000 515,000
Cost of goods put to production 950,000
Add: Work-in-process opening balance as of 01 Jan 19X3 -
Cost of goods in process during the period 950,000
Less: Work-in-process closing balance as of 31 Dec 19X3 -
Cost of goods manufactured 950,000

(b) Total Cost computation

Cost of goods manufactured $ 950,000
Add: Selling expenses $ 80,000
Add: General & administrative expenses $ 50,000
Total Cost $ 1,080,000
(c) Unit Cost computation
Cost of goods manufactured $ 950,000
Total fininshed goods manufactured during the period
(30,000+95,000) 125,000
Per unit cost (950,000 / 125,000) $ 7.60

(d) Prime costs

Direct materials $ 225,000
Direct labour $ 210,000
$ 435,000

(e) Conversion costs

Direct labour $ 210,000
Factory overhead cost: $ 515,000
$ 725,000

(f) Period costs

Selling expenses $ 80,000
General & administrative expenses $ 50,000
$ 130,000

Assignment 1
 Cost accumulation systems
Cost Accounting Chapter 2
Pr 5-5 Journal entries and job order cost sheet

a) Ajax Assembling Company, General Journal (All amounts in US $)

GENERAL JOURNAL Page 1
19XX Explanation L/R Debit Credit

April Work in process inventory 925.00

FOH control account - production 500.00
Direct materials inventory 925.00
Indirect materials inventory 500.00
(Direct and indirect materials requisitioned)

April Work in process inventory - permanent employees 1,942.50

Work in process inventory - other employees 585.00
FOH control account - production 550.00
Payroll payable 3,077.50
(Direct and indirect labour cost incurred)

April Work in process inventory 350.00

FOH applied - production department 350.00
(Applied Factory overhead)

April Finished goods inventory 3,802.50

Work in process inventory 3,802.50
(Transfer of completed goods to finisned goods account)

April Accounts receivable 7,500.00

Cost of goods sold 3,802.50
Finished goods inventory 3,802.50
Sales 7,500.00
(Completed jobs sold)
19,957.50 19,957.50

(b) WIP inventory on 30 June

Opening balance as on 01 June $12,500
Add: Costs applied during the month
Direct materials -
Direct labour -
FOH applied 350 $350
Less: Transferred to finished goods $(52,000)
Closing balance as on 30 June $(39,500)

Assignment 1
 Cost accumulation systems
Cost Accounting Chapter 2

AJAX ASSEMBLING COMPANY

JOB ORDER COST SHEET

CUSTOMER Sonar Sound Supply JOB NO. 821

PRODUCT Radio DATE ORDERED 11 Apil 19XX
QUANTITY 500 DATE STARTED 14 April 19XX
SPECIFICATIONS - DATE WANTED 18 April 19XX
SET SIZE Standard size DATE COMPLETED 18 April 19XX

Direct Materials Direct Labour FOH Applied

Date Req No. Amount ($) Date Description Amount ($) Date Amount ($)
April 492 925.00 April Permanent 1,942.50 April 225.00
April Others 585.00 April 125.00
- -
- -
- -
Total > 925.00 2,527.50 350.00

----------(All amounts in $)-----------

Selling price ($15 x 500) 7,500.00

Factory costs
Direct materials 925.00
Direct labour 2,527.50
Factory overhead 350.00 3,802.50

Gross profit 3,697.50

Selling & administrative

expenses 2% of selling price 150.00

Estimated profit/ (loss) 3,547.50

Assignment 1
 Cost accumulation systems
Cost Accounting Chapter 2
Pr 5-7 Job order journal entries

a) Steinwin Corporation, General Journal (All amounts in US $)

GENERAL JOURNAL for Job 491 Page 1

19XX Explanation L/R Debit Credit

14-Jun Direct materials inventory 4,760

Cash 4,760
(Direct materials purchased)

14-Jun Work in process inventory 4,760

Direct materials inventory 4,760
(Direct materials requisitioned)

18-Jun Work in process inventory 719

FOH control account - production 895
Payroll payable 1,614
(Direct and indirect labour cost incurred)

June FOH control account - production 1,865

Miscellaneous payable 1,865
(Actual FOH costs incurred)

June Work in process inventory 791

FOH applied - production department 791
(Applied Factory overhead)

21-Jun Work in process inventory 3,108

Materials inventory 640
Payroll payable 1,175
FOH applied - production department 1,293
(Normal rework costs allocated to job 491)

21-Jun Work in process inventory 230

Accounts payable 230
(Waste allocated to job 491)

June Fininshed goods inventory 9,607

Work in process inventory 9,607
(Transfer of completed goods to finisned goods account)

June Cash 6,000

Notes receivable - 30 days 6,000
Cost of goods sold 9,607
Finished goods inventory 9,607
Sales 12,000
(Completed job sold)

43,582 43,582

Assignment 1