Comprehensive Job Costing
Week 2 Activity
# 31 Comprehensive Job Costing
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Order Paper NowMoody Blues Chocolate Factory uses job costing to cost its
products. In the first quarter of
operations, the company incurred the following material and labor costs in a
manufacturing a batch of its chocolate candies (the company uses normal costing
to apply overhead to products and uses machine hours as the cost driver).
|
Materials Data: Direct material purchases Direct materials used in production (cost) |
$ 100,000 85,000 |
|
Labor Data: Direct Labor costs |
$ 60,000 |
|
Manufacturing Overhead Data: Overhead application rate per machine hour Machine Hour used |
9.00 10,000 |
|
Inventory Data: Transferred to Finished Goods Cost of Goods sold during the quarter |
210,000 190,000 |
Required:
- Calculate the direct
materials ending inventory
- Calculate the work in
progress ending inventory - Calculate the finished
goods ending inventory
Finished Goods Ending Inventory = $20,000
- At the end of the quarter,
Moody Blues’ actual manufacturing overhead costs totalled $80,000. Calculate the over or underapplied overhead
for the period.
# 37 Process Costing Using FIFO Method
Riley’s Paper Company manufactures computer paper for laser
printers. The following information is
related to production costs incurred in the manufacturing process during the
month of March:
| Reams of Paper | Production Costs | |
|
Beginning Work in Progress (40% complete) |
35,000 | 89,170 |
| Current Period Production | 93,000 | 394,830 |
|
Ending Work in Progress (65% complete) |
20,000 |
The company uses FIFO method of computing equivalent units and
assigning product costs. Production
costs include both the cost of raw materials and conversion costs that are
incurred uniformly in the production process.
Required:
- How many reams of paper
were completed in March?
- Of the reams of paper
completed in March, how many were started and completed during the month?
- How many equivalent
finished units did the company complete in March?
- What is the cost per
equivalent unit? - Calculate the cost of ending work in progress inventory and the
cost of goods manufactured in March.
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