Assignment – Unit 3

You have just begun your job at AKP Manufacturing Co. The company produces special

keyboards made to customer specifications. During August, AKP incurred the following
manufacturing costs: direct materials, $28,019
.00
; direct labour, $15,276.75 and applied factory
overhead, $9,854.50. The following data pertain to these costs:
Summary of Direct Material Requisitions
Dept No
Job No
Req No
Quantity
Cost per Unit
Total Cost
1
9011
B766
2,675
$ 2.23
$ 5965.25
2
9012
B767
125
18.78
2347.50
1
9013
B768
780
8.29
6466.20
1
9011
B769
280
5.72
1601.60
2
9013
B770
95
22.07
2096.65
1
9014
B771
2,945
3.24
9541.80
Total Direct Materials
$28019.00
Summary of Direct Labour Time Tickets
Dept No
Job No
Ticket No
Hours
Rate per Hour
1
9011
1056
-1168
820
$7.25
$ 5945.00
2
9012
2121
-2130
92
8.75
805.00
1
9013
1169
-1189
178
7.25
1290.50
2
9013
2131
-2134
44
8.75
385.00
1
9014
1190
-1239
945
7.25
6851.25
Total Direct Labour
$15276.75
Overhead application rates for Dept.1 are $4 per direct labour hour, and for Dept. 2 are 175%
of direct labour cost. AKP had no beginning work in process for August. Job 9010
, which cost
$14,190.18 to manufacture, was completed in July and was sold on ac
count in August for
$19,000.
Of t
he jobs begun in August, Job 901
1 was completed and sold on account for $24,000, Jobs
9012 and 9014 were co
mpleted but not sold,
and
Job 9013 was
still in process.
Required
1.
As cost accountant for this company, you have
been asked to prepare job cost sheets for
each of the four jobs started in August. Use examples in your textbook as a guide.
2.
On a new tab in your worksheet, p
repare journal entries for the month of August
to:
apply the total direct materials, total direct labour and total manufacturing overhead
Assignment
Unit
3
to the jobs
(use the numbers in the first paragraph of the question)
.
Complete jobs 9011, 9012 and 9014.
Sell job 9010 and 9011.
Set up T
-accounts for Work
-in-progress, Finished Goods, Cost of Goods Sold and Sales.
Post the
journal
entries to the appropriate accounts and
balance each account.
4.
Using the job cost sheets
, prepare a supporting schedule by job number showing the cost
of ending work in process, finished goods and cost of goods sold.
The totals
should match
the
total in the
t-accounts.
Example:
Job A
xxx
Job B
xxx
Job C
xxx
Total
in WIP
xxx
5.
AKP’s management is very concerned about the cost of materials on its jobs. In
particular, materials costs should be under 55% of total costs. For example
, the materials
cost on Job 9010
was
37.6% of total costs. On
each job
cost sheet
create a pie graph
showing the cost components for each job worked on in August. Did AKP maintain good
cost control on each of
its jobs? Explain.
If you need a refresher
for creating pie charts in
Excel
, here is a link to a 7 minute YouTube
video that wi
ll get you started.
–8YMY
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