ACCTG 404 Lesson 4 Assignment: Job-Order Costing Directions: Please change the sheet names at the bottom of the page to the question number. Then,...

ACCTG 404
Lesson 4 Assignment: Job-Order Costing

Directions: Each question of this assignment should be prepared as a separate sheet in one Excel file. Please change the sheet names at the bottom of the page to the question number. Then, follow the directions for each question below. Be sure to show your calculations and label your work for full credit. This assignment is worth 50 points. The grading rubric may be previewed in the Job Order Costing Drop Box.

Custom Cabinets has decided to price their cabinets at 50% above cost. The problem is they are not sure how to assign Factory Overhead. Your manager has asked you to price the following two jobs based on the information provided:

• Estimated Factory Overhead for the year: $500,000

• Estimated Direct Labor Hours for the year: 250,000 hours

• Job 1 has incurred $3,000 of Direct Materials and $2,000 of Direct Labor, which is consistent with 200 hours of labor

• Job 2 has incurred $3,500 of Direct Materials and $3,000 of Direct Labor, which is consistent with 300 hours of labor

1. Assuming Custom Cabinets applies $495,000 of Factory Overhead to all of their jobs this year, but has actual Factory Overhead of $496,000, has overhead been over or under applied?
   

2. If the current COGS is $2,000,000, what should the ending COGS be after reconciling the Actual and Applied Overhead?

Prepare the journal entries needed based on the information below. Use Lesson 4 page 6 to assist you.

• Estimated Overhead for the month: $10,000

• Estimated Direct Labor Hours: 10,000

• Purchased $25,000 of materials

• Requisitioned $20,500 of materials to be placed into production

• Incurred $14,500 of Direct Labor during the month (1450 hours)

• Incurred the following Actual Factory Overhead Amounts:

  • Utilities: 7000

  • Indirect Materials: 500

  • Indirect Labor: 1000

  • Rent: 1000

• Completed 2 jobs with a cost of $10,900

• Sold both jobs completed at a price = cost + 50%

• Applied Overhead is $9,600