45.

(Journal entries, cost flows) Specialty Components began 2002 with three jobs in process:
Job No. 247 251 253 Totals Direct Material $ 77,200 176,600 145,400 $399,200 TYPE OF COST Direct Labor $ 91,400 209,800 169,600 $470,800 Overhead $ 34,732 79,724 64,448 $178,904 Total $ 203,332 466,124 379,448 $1,048,904

During 2002, the following transactions occurred: 1. The firm purchased and paid for $532,000 of raw material. 2. Factory payroll records revealed the following: Indirect labor incurred was $54,000. Direct labor incurred was $602,800 and was associated with the jobs as follows:
Job No. 247 251 253 254 255 256 257 Direct Labor Cost $ 17,400 8,800 21,000 136,600 145,000 94,600 179,400

3. Material requisition forms issued during the year revealed the following: Indirect material issued totaled $76,000. Direct material issued totaled $468,400 and was associated with jobs as follows:
Job No. Direct Material Cost 247 $ 14,400 251 6,200 253 16,800 254 103,200 255 119,800 256 72,800 257 135,200

4. Overhead is applied to jobs on the basis of direct labor cost. Management budgeted overhead of $240,000 and total direct labor cost of $600,000 for 2002. Actual total factory overhead costs (including indirect labor and indirect material) for the year were $244,400. 5. Jobs #247 through #255 were completed and delivered to customers, C.O.D. The revenue on these jobs was $2,264,774. a. Prepare journal entries for all of the above events. b. Determine ending balances for jobs still in process. c. Determine job order cost sheet of jobs completed, adjusted for underapplied or overapplied overhead.

Q2 Young Stuff is a manufacturer of furnishings for infants and children. The company uses a job order cost system. Young Stuffs Work in Process Inventory on April 30, 2002, consisted of the following jobs:
Job No. CBS102 PLP086 DRS114 Items Cribs Playpens Dressers Units 20,000 15,000 25,000 Accumulated Cost $ 900,000 420,000 1,570,000

The companys finished goods inventory, carried on a FIFO basis, consists of five items:
Item Cribs Strollers Carriages Dressers Playpens Quantity and Unit Cost 7,500 units @ $ 64 13,000 units @ $ 23 11,200 units @ $102 21,000 units @ $ 55 19,400 units @ $ 35 Total Cost $ 480,000 299,000 1,142,400 1,155,000 679,000 $3,755,400

Young Stuff applies factory overhead on the basis of direct labor hours. The companys factory overhead budget for the year ending May 31, 2002, totals $4,500,000, and the company plans to expend 600,000 direct labor hours during this period. Through the first 11 months of the year, a total of 555,000 direct labor hours were worked, and total factory overhead amounted to $4,273,500. At the end of April, the balance in Young Stuffs Material Inventory account, which includes both raw material and purchased parts, was $668,000. Additions to and requisitions from the material inventory during May included the following:
Raw Material Additions $242,000 Requisitions: Job #CBS102 51,000 Job #PLP086 3,000 Job #DRS114 124,000 Job #STR077 (10,000 strollers) 62,000 Job #CRG098 (5,000 carriages) 65,000 Job No. CBS102 PLP086 DRS114 STR077 CRG098 Indirect Supervision Hours 12,000 4,400 19,500 3,500 14,000 3,000 Parts Purchased $396,000 104,000 10,800 87,000 81,000 187,000 Cost $122,400 43,200 200,500 30,000 138,000 29,400 57,600 $621,100

During May, Young Stuffs factory payroll consisted of the following:

The jobs that were completed in and the unit sales for May follow:
Job No. Items CBS102 Cribs PLP086 Playpens STR077 Strollers CRG098 Carriages Items Quantity Shipped Cribs 17,500 Playpens 21,000 Strollers 14,000 Dressers 18,000 Carriages 6,000 Quantity Completed 20,000 15,000 10,000 5,000

a. Describe when it is appropriate for a company to use a job order costing system. b. Calculate the dollar balance in Young Stuffs Work in Process Inventory account as of May 31, 2002. c. Calculate the dollar amount related to the playpens in Young Stuffs Finished Goods Inventory as of May 31, 2002. d. Explain the treatment of underapplied or overapplied overhead when using a job order costing system.