Phillips Corporation’s fiscal year ends on November 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year. Other data: 1. On December 1, two jobs were in process: Job No. 154 and Job No. 155. These jobs had combined direct materials costs of $9,850 and direct labor costs of $15,300. Overhead was applied at a rate that was 75% of direct labor cost. 2. During December, Job Nos. 156, 157, and 158 were started. On December 31, Job No. 158 was unfinished. This job had charges for direct materials $4,400 and direct labor $5,000, plus manufacturing overhead. All jobs, except for Job No. 158, were completed in December. 3. On December 1, Job No. 153 was in the finished goods warehouse. It had a total cost of $5,200. On December 31, Job No. 157 was the only job finished that was not sold. It had a cost of $4,200. 4. Manufacturing overhead was $1,295 underapplied in December. Raw Materials Inventory Dec. 1 Beginning balance (a) Dec. 31 Requisitions 18,350 31 Purchases 18,125 Dec. 31 Ending balance 8,205 Work in Process Inventory Dec. 1 Beginning balance (b) Dec. 31 Jobs completed (f) 31 Direct materials (c) 31 Direct labor 8,900 31 Overhead (d) Dec. 31 Ending balance (e) Finished Goods Inventory Dec. 1 Beginning balance (g) Dec. 31 Cost of goods sold (i) 31 Completed jobs (h) Dec. 31 Ending balance (j) Factory Labor Dec. 31 Factory wages 12,225 Dec. 31 Wages assigned (k) Manufacturing Overhead Dec. 31 Indirect materials 3,000 Dec. 31 Overhead applied (m) 31 Indirect labor (l) 31 Other overhead 1,645

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter5: Product And Service Costing: Job-order System

Section: Chapter Questions

Problem 21E: Lorrimer Company has a job-order cost system. The following debits (credits) appeared in the...

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Phillips Corporation’s fiscal year ends on November 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year.

Other data:

1.		On December 1, two jobs were in process: Job No. 154 and Job No. 155. These jobs had combined direct materials costs of $9,850 and direct labor costs of $15,300. Overhead was applied at a rate that was 75% of direct labor cost.
2.		During December, Job Nos. 156, 157, and 158 were started. On December 31, Job No. 158 was unfinished. This job had charges for direct materials $4,400 and direct labor $5,000, plus manufacturing overhead. All jobs, except for Job No. 158, were completed in December.
3.		On December 1, Job No. 153 was in the finished goods warehouse. It had a total cost of $5,200. On December 31, Job No. 157 was the only job finished that was not sold. It had a cost of $4,200.
4.		Manufacturing overhead was $1,295 underapplied in December.

Raw Materials Inventory
Dec. 1	Beginning balance		(a)	Dec. 31	Requisitions	18,350
31	Purchases	18,125
Dec. 31	Ending balance	8,205

Work in Process Inventory
Dec. 1	Beginning balance		(b)	Dec. 31	Jobs completed	(f)
31	Direct materials		(c)
31	Direct labor	8,900
31	Overhead		(d)
Dec. 31	Ending balance		(e)

Finished Goods Inventory
Dec. 1	Beginning balance	(g)	Dec. 31	Cost of goods sold	(i)
31	Completed jobs	(h)
Dec. 31	Ending balance	(j)

Factory Labor
Dec. 31	Factory wages	12,225		Dec. 31	Wages assigned		(k)

Manufacturing Overhead
Dec. 31	Indirect materials	3,000		Dec. 31	Overhead applied	(m)
31	Indirect labor		(l)
31	Other overhead	1,645

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