In the Doghouse Company builds doghouses. They have three sizes: small, medium and large. Each size can

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Question:

In the Doghouse Company builds doghouses. They have three sizes: small, medium and large. Each size can be built in one of two styles, standard or deluxe. All doghouses are built with treated lumber and have shingled roofs. The deluxe model is insulated and has a covered porch. In the Doghouse sells mostly to local hardware and garden stores.

The costs for direct materials and direct labor for each type of doghouse are shown in the table below. The direct materials cost includes costs for lumber, shingles, stain or paint, and insulation. Nails and glue are also used in the construction and are considered indirect materials which make them part of overhead. The company employs two carpenters and a part-time student to maintain the equipment and clean the shop. The carpenters' wages are direct labor. The student's wages are indirect labor and, therefore, part of overhead. Other overhead costs include depreciation of equipment and the building, insurance, utilities, and taxes. Overhead is applied at 10% of direct labor cost. In the Doghouse summarizes costs by direct materials, direct labor, and overhead on its job cost sheets.

	Direct Materials	Direct Labor
Standard:
Small	$64	$60
Medium	111	90
Large	135	150
Deluxe:
Small	$78	$120
Medium	152	180
Large	256	240

At the beginning of August, the company has one job, job number 706, in progress from the previous month. This job is for an order of 16 large, standard doghouses. As of August 1, $432.00 of direct materials have been used, $480.00 of direct labor have been charged to the job and $48.00 of overhead was applied to the job. Click on the link below to get more detail on job number 706.

During August, In the Doghouse received an order for 20 medium, standard doghouses. This is job number 801 and was completed by the end of the month.

Another order was received during the month, job 802, for 12 small, deluxe doghouses. At the end of August, job 802 was still in process. $561.6 of direct materials has been used, $864 of direct labor has been charged to the job, and overhead was applied to job 802 using the predetermined overhead rate of 10% of direct labor cost.

Complete the following job cost sheets for the month of August In the Doghouse and answer the following questions.

Job 706
16 large, standard doghouses
Direct materials		$
Direct labor
Overhead
	Total job cost	$

Job 801
20 medium, standard doghouses
Direct materials		$
Direct labor
Overhead
	Total job cost	$

Job 802
12 small, deluxe doghouses
Direct materials		$
Direct labor
Overhead
	Total job cost	$

What is the balance in Work in Process on August 1? $

What is the balance in Work in Process on August 31? $

Think outside the box:

What element would most likely be missing from a job cost sheet for a service organization? Direct materials

+ Job number 706

Job number 706: The following job cost sheet was prepared at the end of the previous month and shows the direct materials, direct labor, and overhead costs as of the end of the month. When the job is completed in August, the amounts should show the totals for direct materials, direct labor, and overhead.