Your Perfect Assignment is Just a Click Away
We Write Custom Academic Papers

100% Original, Plagiarism Free, Customized to your instructions!

glass
pen
clip
papers
heaphones

BUS 103 Pedriani Company uses a job order cost system and applies overhead to production on the basis of direct labor hours

BUS 103 Pedriani Company uses a job order cost system and applies overhead to production on the basis of direct labor hours

BUS 103 Pedriani Company uses a job order cost system and applies overhead to production on the basis of direct labor hours

Prepare entries in a job order cost system and job cost sheets. (LO 1, 2, 3, 4, 5)

P16-1B Pedriani Company uses a job order cost system and applies overhead to production on the basis of direct labor hours. On January 1, 2017, Job No. 25 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $10,000; direct labor $6,000; and manufacturing overhead $9,000. Job No. 23 had been completed at a cost of $42,000 and was part of finished goods inventory. There was a $5,000 balance in the Raw Materials Inventory account.

During the month of January, the company began production on Jobs 26 and 27, and completed Jobs 25 and 26. Jobs 23 and 25 were sold on account during the month for $63,000 and $74,000, respectively. The following additional events occurred during the month.

  1. Purchased additional raw materials of $45,000 on account.
  2. Incurred factory labor costs of $33,500. Of this amount, $7,500 related to employer payroll taxes.
  3. Incurred manufacturing overhead costs as follows: indirect materials $10,000; indirect labor $9,500; depreciation expense on equipment $12,000; and various other manufacturing overhead costs on account $11,000.
  4. Assigned direct materials and direct labor to jobs as follows.
Job No. Direct Materials Direct Labor
25 $ 5,000 $ 3,000
26 17,000 12,000
27 13,000 9,000
  1. The company uses direct labor hours as the activity base to assign overhead. Direct labor hours incurred on each job were as follows: Job No. 25, 200; Job No. 26, 800; and Job No. 27, 600.

Instructions

(a)  Calculate the predetermined overhead rate for the year 2017, assuming Pedriani Company estimates total manufacturing overhead costs of $440,000, direct labor costs of $300,000, and direct labor hours of 20,000 for the year.
(b)  Open job cost sheets for Jobs 25, 26, and 27. Enter the January 1 balances on the job cost sheet for Job No. 25.
(c)  Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.
(d)  Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.
(e)  Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month.
(f)   Prepare the journal entry (or entries) to record the sale of any job(s) during the month.
(g)  What is the balance in the Work in Process Inventory account at the end of the month? What does this balance consist of?
(h)  What is the amount of over- or underapplied overhead?

Course: BUS 103 Principles of Management
School: Community College of Alleghany County

  • : 15/06/2017
  • : 12

Order Solution Now

Our Service Charter

1. Professional & Expert Writers: Sight Writers only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed of papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Sight Writers are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Sight Writers is known for timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit in all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Sight Writers, we have put in place a team of experts who answer to all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.