Preparing and using a job cost record True Technology, Co., manufactures CDs and DVDs for computer software and entertainment companies. True uses job order costing and has a perpetual inventory system.
On November 2, True began production of 5,500 DVDs, Job 423, for Leopard Pictures for $1.60 sales price per DVD. True promised to deliver the DVDs to Leopard by November 5. True incurred the following costs:
|
11/2 |
Labor Time Record No. |
Description |
Amount |
|
11/3 |
655 |
10 hours @ $18 |
$ 180 |
|
Date |
656 |
20 hours @ $14 |
280 |
|
|
Materials |
|
|
|
|
Requisition |
|
|
|
Date |
No. |
Description |
Amount |
|
11/2 |
63 |
31 lbs. polycarbonate plastic @ $12 |
$372 |
|
11/2 |
64 |
25 lbs. acrylic plastic @ $29 |
725 |
|
11/3 |
74 |
3 lbs. refined aluminum @ $48 |
144 |
Leopard Pictures provides the movie file for True to burn onto the DVDs at a cost of $0.45 per DVD. True Technology allocates manufacturing overhead to jobs based on the relation between estimated overhead of $550,000 and estimated direct labor costs of $500,000. Job 423 was completed and shipped on November 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 5,500 DVDs.