Job order cost accounting | Accounting homework help

For  YourBusinessToutor                   

Giolino cos March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll costb  in April is $363,000.Overhead cost incurred in April are: inderect materials, $50,000; inderect labor, $23,000; factory rent,$32,000; factory utilities, $19,000; and factory equipment depreciation, $51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 cash in April. Cost of the three jobs worked on in April follow.

                                                                                            JOB 306                         JOB 307                     JOB 308

Balance on March 31

    Direct materials …………………………………………………..$ 29,000                           $ 35,000

    Direct labor …………………………………………………………   20,000                              18,000

    Applied overhead………………………………………………….   10,000                                9,000

Cost during April

    Direct materials ……………………………………………………  135,000                            220,000                  $100,000

     Direct labor………………………………………………………….   85,000                             150,000                     105,000

     Applied overhead…………………………………………………        ?                                       ?                                ?

Status on April 30…………………………………………………Finished (sold)                 Finished(unsold)            In process

REQUIRED
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

2. Prepare journal entries for the month of April to record the following.

      a. Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including inderect

          materials and indirect labor. (Factory rent and utilities are paid in cash)

      b. Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory.

      c. Transfer of Job 306 and 307 to the Finished Goods Inventory.

      d. Cost of goods sold for Job 306.

      e. Revenue from the sale of Job 306.

      f.  Assignments of any underapplied or overapplied overhead to the Cost of Goods Sold account.

           (The amount is not material.)

3. Prepare a manufactoring statement of April (use a single line presentation for direct materials and show the details of overhead cost).

4. Compute gross profit for April. Show how to present the inventories on the April 30 balance sheet.

ANALYSIS COMPONENT

5.  The over- or underapplied overhead is closed to Cost of Goods Sold. Discuss how this adjustment inpacts business decision making regarding individual jobs or batches of jobs.