Question

Basic job Costing

1. Our company makes customized jewelry Customer 101 orders a ring (job 101).
2. It requires 2 grams of 14k gold, 1 diamond and 3 rubies.
c. Customer 102 orders a pendant (job 102). It requires 4 grams of 14 k gold, and 1 ruby.
d. Purchasing buys 1,000 grams of 14k gold for $24,000. 10 diamonds for $28,000, and 10 rubies for $14,000.
e. For the month, the company had factory labor costs of $280,000 and 10,000 hours.

Required:
Prepare the journal entry for the purchases/receivings.
Prepare the journal entry for the direct materials requisitions (by job).
Prepare the journal entry for factory payroll.

Answer 1

1) Prepare the journal entry for the purchases/receivings.

Dr Inventory: 14k gold 24,000

Dr Inventory: diamonds 28,000

Dr Inventory: rubies 14,000

Cr Cash (or accounts payable) 66,000

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

Dr Work in process (job 101) 7,480

Cr Inventory: 14k gold 480

Cr Inventory: diamonds 2,800

Cr Inventory: rubies 4,200

Dr Work in process (job 102) 2,360

Cr Inventory: 14k gold 960

Cr Inventory: rubies 1,400

3) Prepare the journal entry for factory payroll.

Dr Work in process 280,000

Cr Wages payable 280,000