ACCOUNTING-Bluebird Manufacturing makes carrying cases for portable electronic devices

QUESTION

Bluebird Manufacturing makes
carrying cases for portable electronic devices. Its costing records yield the
following information:

Job
No.
Date
Total Cost of Job
at October 31
Total Manufacturing Costs
Added in November

Started
Finished
Sold

1
10/3
10/12
10/13
$1,900

2
10/3
10/30
11/1
1,800

3
10/17
11/24
11/27
400
$1,500

4
10/29
11/29
12/3
800
1,200

5
11/8
11/12
11/14

550

6
11/23
12/6
12/9

700

Requirements:

1. Which type of
costing system is Bluebird using? What piece of data did you base your answer
on?

2. Use the data in the table to identify the status of each job.
Compute Bluebird’s account balance at October 31 for Work in process
inventory, Finished goods inventory, and Cost of goods
sold. Compute, by job, account balances at November 30 for Work in process
inventory, Finished goods inventory, and Cost of goods sold.

3. Prepare journal
entries to record the transfer of completed units from Work in process to
Finished goods for October and November.

4. Record the sale
of Job 3 for $2,100.

5. What is the gross
profit for Job 3? What other costs must this gross profit cover?

Lu Technology, Co.,
manufactures CDs and DVDs for computer software and entertainment companies.
Lu uses job order costing and has a perpetual inventory system.
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:

Date
Labor Time Record No.
Description
Amount

4/2
655
10 hours @ $14
$140

4/3
656
20 hours @ $13
260

Date
Material Requisition No.
Description
Amount

4/2
63
31 lbs. polycarbonate plastic @ $11
$341

4/2
64
25 lbs. acrylic plastic @ $27
675

4/3
74
3 lbs. refined aluminum @ $42
126

Stick People
provides the movie file for Lu burn onto the DVDs at a cost of $0.50 per DVD.
Lu Technology allocated 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.

Requirements:

1. Prepare a job cost record 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 5,900
DVDs.

ANSWER:

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