Question: Lu Technology Co manufactures CDs and DVDs for computer software

Lu Technology Co. manufactures CDs and DVDs for computer software and entertainment companies. Lu uses job order costing. 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:

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.

1. Prepare a job cost record for Job 423. Calculate the predetermined overhead allocation 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 the allocation of manufacturing overhead to Job 423.
3. Journalize completion of the job and the sale of the 5,900DVDs.
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  • CreatedJanuary 16, 2015
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