Preparing and using a job cost record
Lu Technology, Co., manufactures CDs and DVDs for computer software and entertainment
companies. Lu uses job order costing and has a perpetual inventory system.
On April 2, Lu began production of 5,900 DVDs, Job 423, for Stick People
Pictures for $1.30 sales price per DVD. Lu promised to deliver the DVDs to Stick
People by April 5. Lu incurred the following costs:
|
Date |
Labor Time Record No. |
Description |
Amount |
|
4/2 |
655 |
10 hours @ $14 |
$ 140 |
|
4/3 |
656 |
20 hours @ $13 |
260 |
|
Date |
Materials |
Description |
Amount |
|
4/2 |
63 |
31 lbs. polycarbonate plastic @ $11 |
$ 341 |
|
4/2 |
64 |
25 lbs. acrylic plastic @ $27 |
675 |
|
4/3 |
74 |
3 lbs. refined aluminum @ $42 |
126 |
Stick People provides the movie file for Lu to burn onto the DVDs at a cost of $0.50 per DVD. Lu Technology allocates manufacturing overhead to jobs based on the relation between estimated overhead of $540,000 and estimated direct labor costs of $432,000. Job 423 was completed and shipped on April 3.
Requirements
1. Prepare a job cost record similar to Exhibit 17-6 for Job 423. Calculate the predetermined overhead rate; then allocate manufacturing overhead to the job.
2. Journalize in summary form the requisition of direct materials (including the movie files) and the assignment of direct labor and manufacturing overhead to Job 423.
3. Journalize completion of the job and the sale of the 5,900 DVDs.