Sie sind auf Seite 1von 4

ACCT 301

Second Assignment

DUE DATE THURSDAY 12th March 2015 BEFORE 11:59 pm


You are to work in this assignment individually. Any suspicious activities or
cheating will result in grade of zero in this assignment.
Instructions: Answer the all questions:
1. Prepare Journal Entries from the following information relating to Job
Costing.
a) The material storeroom receives a shipment of direct and indirect
materials that cost $ 12,000.
b) Materials are sent to the stamping and assembly areas. The Cost of
the direct materials is $ 1,500 and the cost of the indirect materials
is $ 900.
c) Wages totalling $ 2,000 are accrued; 80 % of these costs are direct
labour and 20% are indirect labour.
d) Overhead costs are allocated to work in process using an allocation
rate of 150% of direct labour costs.
e) Job No. 1205, with a total cost of $ 2,500 is completed.
f) Job No. 1205 is shipped to the customer, who is billed for $ 5,000.
Solution:
Date
A
B
C
D
E
F

Accounts
Raw Material Inventory
Cash
Work in Process inventory
Overhead Cost Control
Raw material inventory
Work in Process Inventory ($2,000 80%)
Overhead Cost Control
Raw material inventory
Work in Process Inventory ( $1,600 150% )
Overhead Cost Control
Finished Goods inventory
Work in process Inventory
Accounts receivable
Sales revenue
Cost of goods sold
Finished goods inventory

Dr.
12,000

Cr.
12,000

1,500
900
2,400
1,600
400
2,000
2,400
2,400
2,500
2,500
5,000
5,000
2,500
2,500

Q.2 Following are production data for a process costing system.


Beginning work in process, 30% complete
12,000 units
Started

90,000 units

Ending work in process, 70% complete8,000 units


Costs:
Beginning work in process:
Direct Materials
Conversion costs

$ 28,800
5,220

Materials used during the period 216,000


Conversion costs incurred during the period

139,200

a. Compute EUP for DM and CC if DM costs are incurred evenly


throughout production.
b. Using the weighted average, prepare a process costing report.
c. Write out the journal entries for the costs incurred and the work
performed this period under the weighted average method.
Solution:
a. Compute EUP for DM and CC if DM costs are incurred evenly
throughout production.

b. Using the weighted average, prepare a process costing report.


Calculate actual cost per equivalent unit
Weighted average
Direct materials
Conversion costs
Total cost per equivalent unit

Costs
$ 244,800
$ 144,420

Equivalent
units
99,600
99,600

Cost per equivalent unit


$
2.4578
$
1.4500
$
3.9078

Process cost reports


Weighted average
Units
Costs
Total units completed &
transferred out
Ending work in process:
Materials
Conversion
Total cost of EWIP
Total accounted for

94,000
8,000

102,000

Computation

367,336

94,000 * $3.9078
8,000 * 70% * $2.4578
8,000 * 70% * $1.4500

13,764
8,120
21,884
389,220

c. Write out the journal entries for the costs incurred and the work
performed this period under the weighted average method.
Work in process inventory
Raw material inventory

$216,000

Work in process inventory


A/P, Wages Payable, etc.

$139,200

Finished goods inventory


Work in process inventory

$367,336

$216,000
$139,200
$367,336

Q.3
(A) How is overhead cost allocated in job costing?
Overhead costs are the indirect costs that cannot be traced to jobs, it must
be allocated to jobs using an overhead allocation base ( Cost Driver ), the
companies usually use an estimated overhead allocation rate

(B) Discuss the Treatment of Normal an Abnormal Spoilage under


Job Costing.
Normal spoilage consists of defective units that arise as part of regular operations. If normal
spoilage arises from the requirements of a specific job, the cost of the spoiled units is charged to
this job, another case arise if the Normal spoilage occurs periodically as a regular part of all job
in this case the cost of normal spoilage is charged to overhead and is allocated with other
overhead costs to all jobs.
In other hand the Abnormal spoilage is spoilage that is not part of everyday operations in this
case the abnormal spoilage is recorded in a Loss