11-119-1 Accounting Using Excel for Success PowerPoint Presentation by: Douglas Cloud, Professor Emeritus Accounting, Pepperdine University © 2011 Cengage.

11-119-1

Accounting Using Excel for Success

PowerPoint Presentation by:PowerPoint Presentation by:Douglas Cloud, Professor Emeritus Accounting, Pepperdine UniversityDouglas Cloud, Professor Emeritus Accounting, Pepperdine University

© 2011 Cengage Learning. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, All Rights Reserved. May not be copied, scanned,

or duplicated, in whole or in part, except for use as or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain permitted in a license distributed with a certain product or service or otherwise on a password-product or service or otherwise on a password-

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Job Order Costing

19

Student Version

11-219-219-2

2

Describe and illustrate a job order cost accounting system.

11-319-3

Materials Information and Cost Flows

To Materials Requisitions

a.

2

Exhibit 3

11-419-4

From Materials Ledger Account

Job Cost Sheets

Materials Requisitions

b.

b.

b.

b.

2Materials Information and Cost Flows (continued)Exhibit 3

11-519-5

The journal entry to record the supplier’s invoice related to Receiving Report 196 is as follows:

InvoiceReceiving

Report No. 196

750 units of No. 8 Maple

Wood

2

11-619-6

A summary of the materials requisitions is used as a basis for the journal entry recording the materials used for the month. For the requisition of direct materials, the following entry is made:

2

11-719-7

Factory Labor

When employees report for work, they may use clock cards or in-and-out cards. When employees work on an individual job, they use time tickets.

2

11-819-8

On December 26, 2010, S. Andrews spent eight hours on Job 72 at an hourly rate of $15 for a cost of $120 (8 hrs. × $15). A total of 500 hours was spent by all employees who worked on Job 72 during December, for a total cost of $7,500.

A Closer Look at Job 72

2

11-919-9

December Job 72 (500 hours) for a total cost

of $7,500

to Job Cost Sheet

Labor Information and Cost Flows (a closer look)

2

(continued)

Exhibit 4

11-1019-10

The same procedure is followed for Job 71.

from Time

Sheets

Labor Information and Cost Flows (continued)

2

Exhibit 4

11-1119-11

A total of 500 hours was spent by employees on Job 72 during December for a total cost of $7,500. A summary of the time tickets is used as the basis for the following journal entry:

2

11-1219-12

Factory Overhead Cost

Factory overhead includes all manufacturing costs except direct materials and direct labor. Factory overhead costs are derived from a variety of sources including the following:1. Indirect materials2. Indirect labor3. Factory power4. Factory depreciation

2

11-1319-13

The factory overhead of $4,600 incurred in December for Legend Guitars would be recorded as follows:

2

11-1419-14

To provide current job costs, factory overhead may be allocated or applied to production using a predetermined factory overhead rate.

Predetermined Factory Overhead Rate

Predetermined Factory Overhead Rate

Estimated TotalFactory Overhead Costs

Estimated Activity Base=

2

11-1519-15

Management estimates factory overhead costs to be $50,000 and the activity base to be 10,000 direct labor hours. The predetermined overhead rate is calculated in Slide 16.

2

11-1619-16

Estimated Total Factory Overhead Costs Estimated Activity Base

Predetermined Factory

Overhead Rate=

$50,000

10,000 direct labor hours


Overhead Rate=

= $5 per direct labor hour


Overhead Rate

2

11-1719-17

Two jobs that were worked on in December. When overhead is applied to both jobs, the entry is for $4,250 ($1,750 + $2,500).

2

11-1819-18

Overapplied and Underapplied Factory Overhead

Underapplied balance

Overapplied balance

2

11-1919-19

The journal entry to eliminate Legend Guitars’ underapplied overhead balance of $150 at the end of the calendar year would be:

Disposal of Factory Overhead Balance

2

11-2019-20

Work in Process

During the period, Work in Process is increased (debited) for the following:1. Direct material cost2. Direct labor cost

3. Applied factory overhead cost

2

11-2119-21

At the end of the accounting period (December 31) the total costs for Job 71 are determined and the following entry is made:

2

11-2219-22

Sales and Cost of Goods Sold

During December, Legend Guitars sold 40 Jazz Series guitars for $850, generating total sales of $34,000 ($850 × 40 guitars).

2

11-2319-23

The cost of the guitars sold was $500 per guitar or a total cost of $20,000 ($500 × 40 guitars).

2

11-2419-24

• Selling expenses are incurred in marketing the product and delivering the sold product to the customer.

2

• Administrative expenses are incurred in managing the company, but are not related to the manufacturing or selling functions.

11-2519-25

During December, Legend Guitars recorded the following selling and administrative expenses:

2

11-2619-26

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000

Materials Factory Overhead Work in Process

a. Materials purchased during December

Materials LedgerNo. 8 Wood—Maple

Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

Credit Accounts Payable for $10,500

(a) 10,500

(a) 10,500

Flow of Manufacturing Costs for Legend Guitars

2

Exhibit 8

11-2719-27

Materials Factory Overhead Work in ProcessDec. 1 6,500 Dec. 1 200 Dec. 1 3,000

b. Materials requisitioned to jobs


Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(b) 13,000

20 Units of Jazz Series Guitars, Job 71Dec. 1 3,000

60 Units of American Series Guitars, Job 72

Job Cost Sheets

(b) Direct materials 2,000

(b) Direct materials 11,000

2Flow of Manufacturing Costs for Legend Guitars (continued)

Exhibit 8

(continued)

11-2819-28


c. Factory labor used in productions of jobs


Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000 (c) 11,000

Credit Wages Payable, $11,000

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000


Exhibit 8

(continued)

11-2919-29



Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000 (c) 11,000

20 Units of Jazz Series Guitars, Job 71Dec. 1 3,000(b) Direct materials 2,000

60 Units of American Series Guitars, Job 72(b) Direct materials 11,000

Job Cost Sheets

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(c) Direct labor 3,500

(c) Direct labor 7,500


Exhibit 8

(continued)

11-3019-30


d. Factory overhead incurred in production


Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(d) 500

(c) 11,000 (d) 500

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(d) 200

(d) 300

Indirect materials used, $500


Exhibit 8

(continued)

11-3119-31




Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(d) 500

(c) 11,000 (d) 500 (d) 900

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(d) 200

(d) 300

Utility bill, $900


Exhibit 8

(continued)

credit Utilities Payable, $900

11-3219-32




Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(d) 500

(c) 11,000 (d) 500 (d) 900

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(d) 200

(d) 300

(d) 1,200

Depreciation on factory machinery, $1,200


Exhibit 8

(continued)

credit Accumulated Deprecation, $1,200

11-3319-33



Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(d) 500

(c) 11,000 (d) 500 (d) 900

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(d) 200

(d) 300

(d) 1,200

Indirect labor, $2,000

(d) 2,000



Exhibit 8

(continued)

credit Wages Payable, $2,000

11-3419-34

e. Factory overhead is applied to jobs according to the predetermined overhead rate


Exhibit 8

(continued)

11-3519-35



Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(d) 500

(c) 11,000 (d) 500 (d) 900

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(d) 200

(d) 300

(d) 1,200 (d) 2,000

(e) 4,250

(e) 4,250

20 Units of Jazz Series Guitars, Job 71Dec. 1 3,000(b) Direct materials 2,000(c) Direct labor 3,500

60 Units of American Series Guitars, Job 72(b) Direct materials 11,000(c) Direct labor 7,500

Job Cost Sheets

(e) Factory overhead 1,750

(e) Factory overhead 2,500


Exhibit 8

(continued)

11-3619-36

f. Closed underapplied factory overhead to cost of goods sold



Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(d) 500

(c) 11,000 (d) 500 (d) 900

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(d) 200

(d) 300

(d) 1,200 (d) 2,000

(e) 4,250

(e) 4,250

(f) 150

debit Cost of Goods Sold, $150


Exhibit 8

(continued)

11-3719-37

g. Job 71 completed in December



Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(d) 500

(c) 11,000 (d) 500 (d) 900

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(d) 200

(d) 300

(d) 1,200 (d) 2,000

(e) 4,250

(e) 4,250

(f) 150

(g) 10,250

20 Units of Jazz Series Guitars, Job 71Dec. 1 3,000(b) Direct materials 2,000(c) Direct labor 3,500(d) Factory overhead 1,750

10,250

Job Cost Sheets


Exhibit 8

(continued)

11-3819-38



Glue

Sandpaper

Dec. 1 6,000

Dec. 1 200

Dec. 1 300

(a) 10,500(b) 13,000

(a) 10,500 (b) 13,000

(d) 500

(c) 11,000 (d) 500 (d) 900

Dec. 1 6,500 Dec. 1 200 Dec. 1 3,000(b) 13,000

(d) 200

(d) 300

(d) 1,200 (d) 2,000

(e) 4,250

(e) 4,250

(f) 150

(g) 10,250

Dec. 1 20,000 (g) 10,250

Finished Goods

Dec. 1 20,000 (g) 10,250

Finished Goods Ledger

Jazz Series Guitars


Exhibit 8

(continued)

11-3919-39

Work in Process (b) 13,000 (c) 11,000

Dec. 1 3,000

(e) 4,250

(g) 10,250

Dec. 1 20,000 (g) 10,250

Finished Goods

Dec. 1 20,000 (g) 10,250

Finished Goods LedgerJazz Series Guitars

(f) 150

Cost of Goods Sold

h. Sold 40 units of Jazz Series guitars on account

Accounts Receivable XXX Sales XXX


Exhibit 8

(continued)

11-4019-40

Work in Process (b) 13,000 (c) 11,000

Dec. 1 3,000

(e) 4,250

(g) 10,250

Dec. 1 20,000 (g) 10,250

Finished Goods

Dec. 1 20,000 (g) 10,250

Finished Goods LedgerJazz Series Guitars

(i) 20,000(f) 150

Cost of Goods Sold

i. Cost of 40 units of Jazz Series guitars sold

(i) 20,000

(i) 20,000


Exhibit 8

(continued)

11-4119-41

11-119-1 Accounting Using Excel for Success PowerPoint Presentation by: Douglas Cloud, Professor Emeritus Accounting, Pepperdine University © 2011 Cengage.

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