Module 4 Job Costing Homework

Canvas Casas makes custom tents. Selling and cost details are below.
Work through each of the tabs to help Canvas Casa understand their costs and margins and to prepare the acconting for the period.
Assumptions:
Canvas Casas makes custom tents.
A standard tent sells for $400
A deluxe tent sells for $1,000
Customers can add extra waterproofing to their tent for $300
The standard tent requires 10 yards of fabric
The deluxe tent requires 25 yards of fabric
One bottle of waterproofer is required to extra waterproof either a standard or a deluxe tent
the canvas for the tents costs $25/yard
one bottle of waterproofer costs $150
Direct labor costs $25/hour
Manufacturing a standard tent requires 3 hours of DL
Manufacturing a deluxe tent requires 4 hours of DL
Waterproofing a tent does not require any extra DL because the extra waterproofing can be applied at the same time as the standard waterproofing
Annual FOH includes the following:
Indirect Materials 20,000
Indirect labor 50,000
Rent 35,000
Utilities 10,000
Depreciation on equipment 16,250
The company expects to manufacture 1,000 tents in the current period as follows:
500 standard tents
500 deluxe tents
The company allocates FOH based on DL$
Orders: All orders are completed and sold in the current year
201 200 standard tents with standard waterproofing
202 400 standard tents with extra waterproofing
203 420 deluxe tents with extra waterproofing
Module 4 Job Costing Homework
Instructions:
1) Identify Direct Material Costs

Standard Tent

Deluxe Tent

Extra Waterproofing
2) Identify Direct Labor Costs

Standard Tent

Deluxe Tent

3) Calculate total Factory Overhead (FOH) for the period:

4) Identify the FOH allocation activity base (denominator):

5) Calculate the estimated activity base (denominator):

6) Calculate the FOH allocation rate:

Module 4 Job Costing Worksheet 1
Instructions:
7) Calculate the sales price for each job

201

202

203

Total Sales for the period

Module 4 Job Costing Worksheet 1
8) Calculate the job costs for each job, as well as the Gross Profit and Margin (gross profit %)
Job # 201 200 Standard Tents with standard waterproofing
Components Direct Materials Direct Labor Overhead Total Sales

Tent - -Cost

Extra
waterproofing - Gross Profit

Total - - - - Gross Profit %

Job # 202 400 standard tents with extra waterproofing
Components Direct Materials Direct Labor Overhead Total Sales

Tent - -Cost

Extra
waterproofing - Gross Profit

Total - - - - Gross Profit %

Job # 203 420 Deluxe tents with extra waterproofing
Components Direct Materials Direct Labor Overhead Total Sales

Tent - -Cost

Extra
waterproofing - Gross Profit

Total - - - - Gross Profit %

Module 4 Job Costing Worksheet 1
Instructions:
9) Prepare a summary of the cost of all jobs in the period

Total Job Costs Direct Materials Direct Labor Overhead Total

201 -

202

203 -

Total - - - -
Module 4 Job Costing Worksheet 1
Instructions:
10) Prepare the journal entry to record the RM purchased (include indirect materials)

DR

DR

CR
11) Prepare the journal entry to move direct materials to WIP:

DR

CR
12) Prepare the journal entry to record wages and to move direct labor $ to WIP:

DR

DR

CR

DR

CR
13) Prepare the journal entry to move Indirect Costs to FOH:

DR

CR

CR

CR

CR

CR
Module 4 Job Costing Worksheet 1
14) Prepare the journal entry to move FOH to WIP (only the FOH actually applied)

DR

CR
15) Prepare the JE to move WIP to Finished Goods

DR

CR
16) Prepare the JE to move Finished goods to Cost of Goods Sold (COGS)

DR

CR
Module 4 Job Costing Worksheet 1

17) Prepare a T account to determine whether FOH was over or under applied:

18) Prepaere the JE to zero our FOH - charge the amount over or underapplied to COGS

DR

CR

29) Calculate total sales, COGS, Gross Profit and Gross Profit % for the period

Total Jobs Job 201 Job 202 Job 203 Total

Sales

COGS

Gross Profit

Margin (gross profit %)