Reference no: EM132652814

Problem - Basic job Costing

Our company makes customized jewelry.

Customer 101 orders a ring (job 101). It requires 1.5 grams of 14k gold, 2 diamond2 and 1 ruby.

Customer 102 orders a pendant (job 102). It requires 5 grams of 14 k gold, and 1 ruby.

Purchasing buys 1,000 grams of 14k gold for $20,000. 10 diamonds for $30,000, and 10 rubies for $11,000.

For the month, the company had factory labor costs of $275,000 and 10,000 hours.

1. Enter the journal entry for the purchases/receivings.

2. Enter the journal entry for the direct materials requisitions (by job).

3. Prepare the journal entry for factory payroll.

4. Enter the journal entry for direct labor. Job 101 required 6 hours of labor. Job 102 required 8 hours of labor (by_job) (hint: compute the average rate).

5. 25 grams of gold went to indirect materials. Prepare the journal entry.

6. 10 hours of labor went to indirect labor. Prepare the journal entry.

7. Overhead is applied at a rate of 75% of direct materials AND direct labor COSTS. Show the journal entries. (by job)

8. Show the journal entry for the completion for each job.

9. Assume the company has a 25% markup. What is the price of each job?

10. Show Sales, CGS and Gross Profit in income statement format for the two jobs (by_ job)?