Question

The following information is from the materials requisitions and time tickets for Job 9-1005 completed by Great Bay Boats. The requisitions are identified by code numbers starting with the letter Q and the time tickets start with W. At the start of the year, management estimated that overhead cost would equal 110% of direct labor cost for each job. Determine the total cost on the job cost sheet for Job 9-1005.

Date Document Amount
7/1/2103 Q-4698 $1,250
7/1/2013 W-3393 600
7/5/2013 Q-4725 1,000
7/5/2013 W-3479 450
7/10/2013 W-3559 300
Job order costing:
Job order costing is a system for assigning manufacturing costs to an individual product. Manufacturing costs are divided into three categories which are direct materials, direct labor, and manufacturing overhead. Direct materials are the cost of the materials needed to make or finished the product. Direct labor is the cost of the wages for the workers involved in turning the raw materials into a finished product. Manufacturing overhead or factory overhead is all other costs acquired in the manufacturing activity which cannot be directly accounted to the physical units.

Answer 1

Solution:

Costing of the work order refers to the scheme by which batches of the product or particular component are allocated production costs.  

The costs of the work order shall be borne where the commodity generated by the firm is substantially specific. Consequently, the expense of Job No. 9-1005 is estimated as follows:

Particulars                                                   Amount

Direct material issued to Q-4698               $1.250

Direct material issued to Q-4725               $1,000

Direct Labor issued to W-3393                   $600

Direct Labor issued to W-3479                   $450

Direct Labor issued to W-3559                   $300

Overhead (51.350 x 1. I)                               $4.160

Cost pertaining to Job No. 9-1005             $5,085  

Hence, it is ascertained that the cost pertaining to Job No. 9-1005 accounts for  $5,085