Robert Perez is a contractor specializing in custom-built Jacuzzis. As of May 1, 2016, Perez has incurred
Question:
Robert Perez is a contractor specializing in custom-built Jacuzzis. As of May 1, 2016, Perez has incurred the following costs for each of the jobs listed below. Perez uses the Job Order Cost system.
STINER | ALTON | HERMAN | |||||
---|---|---|---|---|---|---|---|
TOTAL | $5,900 | TOTAL | $4,040 | TOTAL | $2,260 | ||
DM | $2,500 | DM | $2,000 | DM | $ 900 | ||
DL | $2,000 | DL | $1,200 | DL | $ 800 | ||
FOH | $1,400 | FOH | $ 840 | FOH | $ 560 |
During May, Perez incurs the following costs below.Perez begins one job during the month of May (Smith) and completes the other three during the course of the month (Stiner, Alton, and Herman). Factory Overhead is charged to jobs on the basis of $.70 per dollar of direct labor hours.
MATERIALS REQUISITIONS | TIME TICKETS | |
---|---|---|
STINER | $ 500.00 | $ 400.00 |
ALTON | $ 600.00 | $1,000.00 |
HERMAN | $2,300.00 | $1,300.00 |
SMITH | $1,900.00 | $2,300.00 |
Submission Requirements
Use thisM1 Product Cost Project Excel(Links to an external site.) template to provide the following information:
1. Determine the allocated Factory Overhead (FOH) for each job.
MATERIALS REQUISITIONS | TIME TICKETS | FOH (ALLOCATED) | |
---|---|---|---|
STINER | $ | $ | $ |
ALTON | $ | $ | $ |
HERMAN | $ | $ | $ |
SMITH | $ | $ | $ |
2. Determine the total cost of each of the completed jobs.
STINER | ALTON | HERMAN | |||||
---|---|---|---|---|---|---|---|
TOTAL | $ | TOTAL | $ | TOTAL | $ | ||
DM | $ | DM | $ | DM | $ | ||
DL | $ | DL | $ | DL | $ | ||
FOH | $ | FOH | $ | FOH | $ |
3. What is the total amount left in the Work in Process account at the end of May?
Hint:Use the job cost sheet for open job(s)!
SMITH | |
---|---|
TOTAL | |
DM | |
DL | |
FOH |
4. Determine the amount of gross profit for each of the completed jobs, assuming they were sold for $13,000 each to the customer.
STINER | ALTON | HERMAN | |||
---|---|---|---|---|---|
Gross Profits | $ | $ | $ | ||
Sales Revenue | $ | $ | $ | ||
Cost of Goods Sold | $ | $ | $ |
5. If actual FOH costs are as follows, evaluate whether FOH is over or under-applied. Discuss the impact on Gross Profit (and Net Income) if this is left unaddressed.
Indirect Materials | Indirect Labor | Other FOH | ||
---|---|---|---|---|
$1,500.00 | $2,000.00 | $1,400.00 |