1 S2-3 Comprehensive Job Order Costing Case Sampson Company uses a job order cos
ID: 2338223 • Letter: 1
Question
1 S2-3 Comprehensive Job Order Costing Case Sampson Company uses a job order cost system with overhead applied to products based on direct labor hours. Based on previous history, the company estimated its total overhead for the coming year (2016) to be $720,000 and its total direct labor hours to be 24,000 On January 1, 2016, the general ledger of Sampson Company revealed that it had one job in process (Job 102) for which it had incurred a total cost of $15,000. Job 101 had been finished the previous month for a total cost of $30,000 but was not yet sold. The company had a contract for Job 103 but had not started working on it yet. Other balances in Raw Materials Inventory and other assets, liabilities, and stockholders' equity accounts are summarized on the next page.Explanation / Answer
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Answer 1
Budgeted overhead
720000
Budgeted direct labor hour
24000
Overhead rate per labor hour (720000/24000)
$ 30.00
Answer 2
Job 101
Job 102
Job 103
Total
Direct labour hour worked in January
0
300
200
500
Beginning work in progress
30000
15000
45000
For January
Direct material
0
2000
5000
7000
Direct labor (direct labour hour worked in January *25)
0
6000
4000
10000
Applied overhead (direct labour hour worked* 30)
0
9000
6000
15000
Total cost added in January
0
17000
15000
32000
Total cost (Jan 31)
30000
32000
15000
77000
Status on Jan
Finished goods (sold)
Finished goods (unsold)
In progress
Cost included in
Cost of goods sold
Finished goods Inventory
Work in progress inventory
Overhead applied to job during period
15000
Answer 3
Job 102
Finished goods Inventory
32000
Job 103
Work in progress inventory
15000
Answer 4
Journal entries
Date
Account title
Debit
Credit
A
Raw material inventory
10000
Account payable
10000
(To record Purchase of raw material inventory on account.)
B
Manufacturing overhead
2000
Work in progress inventory
7000
Raw material inventory
9000
(To record issue of indirect and direct material.)
C
Salaries expense
5000
Manufacturing overhead
4000
Work in progress inventory
10000
Salaries and wages payable
19000
D
Work in progress inventory
15000
Manufacturing overhead
15000
(To record applied of overhead.)
E 1
Manufacturing overhead
6000
Cash
6000
(To record factory rent paid.)
E 2
Manufacturing overhead
5000
Accumulated depreciation
5000
(To record depreciation expense)
E 3
Manufacturing overhead
3000
Prepaid insurance
3000
(To record insurance expense.)
E 4
Manufacturing overhead
2000
Utility payable
2000
(To record utility expense.)
F 1
Selling, general and administration expense (advertisement expense)
2000
Cash
2000
(To record advertisement expense paid.)
F 2
Selling, general and administration expense (depreciation expense)
3000
Accumulated depreciation
3000
(To record depreciation expense)
F 3
Selling, general and administration expense (Other cost )
1000
Other payable & liability
1000
(To record other costs.)
H
Finished goods inventory
32000
Work in progress inventory
32000
(To record completion of Job into finished goods.)
G 1
Cost of goods sold
30000
Finished goods inventory
30000
(To record cost of goods sold.)
G 2
Cash
55000
Sales revenue
55000
(To record sales revenue of Job 101.)
Under applied of manufacture overhead
Manufacture overhead applied
15000
Manufacture overhead incurred (less)
16000
Over (Under) applied of manufacture overhead
$ (1,000)
Under applied of manufacture overhead
$ 1,000
As per policy, we cannot able to post solution more than four sub parts of question.
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