The Leblanc Company employs a job order cost system to account for its costs. Th
ID: 2433762 • Letter: T
Question
The Leblanc Company employs a job order cost system to account for its costs. The company has three production departments. Separate departmental cost driver rates are employed because the demand for support activities for the three departments is very different. All jobs generally pass through all three production departments Data regarding the hourly direct labor rates, and three jobs on which work was done during June appear below. Jobs 101 and 102 were completed during June, while job 103 was not completed as of June 30. The costs charged to jobs not completed at the end of a month are shown as work in progress inventory at the end of the month and at the beginning of the next month:
Production Departments Direct Labor Rate Cost Driver Rates
Department 1 $12 150% of direct material cost
Department 2 18 $8 per machine hour
Department 3 15 200% of direct labor cost
Job 101 Job 102 Job 103
Beginning work in process $25,000 $32,400 $0
Direct materials:
Department 1 $40,000 $26,000 $58,000
Department 2 3,000 5,000 14,000
Department 3 0 0 0
Direct labor hours:
Department 1 500 400 300
Department 2 200 250 350
Department 3 1,500 1,800 2,500
Machine hours:
Department 1 0 0 0
Department 2 1,200
Explanation / Answer
Job 101
Job 102
Job 103
$25,500
$32,400
0
Department 1
Driver 1
$40,000
$26,000
$58,000
500 x $12
$6,000
400 x $12
$4,800
300 x $12
$3,600
$40000 x 150%
$60,000
$26000x150%
$39,000
$58,000 x 150%
$87,000
$3,000
$5,000
$14,000
200 x $18
$3,600
250 x $18
$4,500
350 x $18
$6,300
1200 x 8
$9,600
1500 x 8
$12,000
2700 x 8
$21,600
0
0
0
1500 x $15
$22,500
1800 x $15
$27,000
2500 x $15
$37,500
$22,500 x 200%
$45,000
$27,000 x 200%
$54,000
$37,500 x 200%
$75,000
$215,200
$204,700
$303,000
Job 101
Job 102
Job 103
Begining WIP$25,500
$32,400
0
Department 1
Driver 1
Direct Materials$40,000
$26,000
$58,000
Direct labor500 x $12
$6,000
400 x $12
$4,800
300 x $12
$3,600
Support cost$40000 x 150%
$60,000
$26000x150%
$39,000
$58,000 x 150%
$87,000
Department 2 Direct Materials$3,000
$5,000
$14,000
Direct labor200 x $18
$3,600
250 x $18
$4,500
350 x $18
$6,300
Support cost1200 x 8
$9,600
1500 x 8
$12,000
2700 x 8
$21,600
Department 3 Direct Materials0
0
0
Direct labor1500 x $15
$22,500
1800 x $15
$27,000
2500 x $15
$37,500
Support cost$22,500 x 200%
$45,000
$27,000 x 200%
$54,000
$37,500 x 200%
$75,000
Total Cost$215,200
$204,700
$303,000
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