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question stellar sound inc which uses a job order costing system had twojobs in proc 4290802

Question

Stellar Sound, Inc. which uses a job-order costing system, had twojobs in process at the start of 20×1: job no. 64 ($84,100) and jobno. 65 ($53,300). The following information is available:

a. 

The company applies manufacturing overhead on the basis of machinehours (based on practical capacity). Budgeted overhead and machineactivity for the year were anticipated to be $808,000, and 16,000hours, respectively.

b.   The company worked on four jobs during the firstquarter. Direct materials used, direct labor incurred, and machinehours consumed were as follows:

job no

direct material

direct labor

machine hours

64

21,000

35,000

1200

65

 

22000

700

66

44,000

65000

2000

67

15000

8800

500

c.    Manufacturing overhead during the firstquarter included charges for depreciation ($33,900), indirect labor($60,100), indirect materials used ($5,100), and other factorycosts ($139,600).

d.   Stellar Sound completed job no. 64 and job no. 65.Job no. 65 was sold on account, producing a profit of $34,900 forthe firm.

1.   Determine the company’s predetermined overheadapplication rate.

2. 

Prepare journal entries as of March 31 to record the following. (Note: Use summary entries where appropriate by combining individualjob data.) (Omit the “$” sign in your response.)

a. 

The issuance of direct material to production and the direct laborincurred.

General Journal   Debit   Credit

b. 

The manufacturing overhead incurred during the quarter.

General Journal   Debit   Credit

c. 

The application of manufacturing overhead to production.

General Journal   Debit   Credit

d. 

The completion of jobs no. 64 and no. 65.

General Journal   Debit   Credit

 

e. 

The sale of job no. 65.

General Journal   Debit   Credit

3.    Determine the cost of the jobs still inproduction as of March 31.

4.   Did the finished-goods inventory increase ordecrease during the first quarter? By how much?

5.   Was manufacturing overhead under- or overapplied forthe first quarter of the year? By how much?

 

 

 

 

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