COST ACCOUNTING AND CONTROL
LEARNING EVIDENCE 1
Submitted To:
Leah May Mijares Santiago, CPA, PhD
Submitted By:
Lailee Jean Mogi
COMA 3B
1. Journal Entries
Transactions for October
Debit
1.
Raw Materials Inventory
Accounts Payable
To record the purchase of materials on account for Precast.
1,150,000
Work In Process – P
Manufacturing Overhead – P
Raw Materials Inventory
650,000
500,000
2.
Manufacturing Overhead – C
Accounts Payable
To record utilities installed at the bridge site.
3.
Manufacturing Overhead – P
Cash
To record rent paid for temporary construction site by precast dept.
4.
No Journal Entries
5.
Manufacturing Overhead – C
Cash
To record payment for machine rental expense
6.
Raw Materials Inventory
Accounts Payable
To record the purchase of additional materials on account.
7.
Work In Process – P
Manufacturing Overhead – P
Cash
Accumulated Depreciation - P
To record the payment of bills and depreciation under the Precast
Dept.
Work In Process – C
Manufacturing Overhead – C
Credit
1,150,000
1,150,000
25,000
25,000
5,000
5,000
60,000
60,000
1,485,000
1,485,000
45,000
36,320
66,120
15,200
16,300
18,650
26,200
Cash
Accumulated Depreciation - P
To record the payment of bills and depreciation under the
Construction Dept.
8.
Accounts Payable
Cash
To record payment for materials purchased in Oct. 1 and 6.
9.
Work In Process – P
Manufacturing Overhead – P (6,000 x 25)
To record overhead applied to production in the Precast Dept.
Work In Process – C
Manufacturing Overhead – C (16,300 x 1.65)
To record overhead applied to production in the Construction Dept.
Transactions for November
1.
Manufacturing Overhead – C
Cash
To record payment for crane rental
2.
Work In Process – P
Manufacturing Overhead – P
Raw Materials Inventory
To record materials issued to Precast Dept.
3.
Manufacturing Overhead – P
Cash
To record rental payment for temporary site occupied by Precast
Dept.
4.
Work In Process – C
Manufacturing Overhead – C
Raw Materials Inventory
8,750
2,635,000
2,635,000
150,000
150,000
26,895
26,895
Debit
Credit
5,000
5,000
825,000
175,000
1,000,000
5,000
5,000
200,000
225,000
425,000
To record materials issued to Construction Dept.
5.
No Journal Entry
6.
No Journal Entry
7.
No Journal Entry
8.
Work In Process – P
Manufacturing Overhead – P
Cash
Accumulated Depreciation – P
To record the payment of bills and depreciation under the Precast
Dept.
Work In Process – C
Manufacturing Overhead – C
Cash
Accumulated Depreciation - P
To record the payment of bills and depreciation under the
Construction Dept.
9.
Work In Process – P
Manufacturing Overhead – P (3,950 x 25)
To record overhead applied to production in the Precast Dept.
115,000
54,050
153,850
15,200
134,300
43,850
158,800
18,350
98,750
98,750
Work In Process – C
Manufacturing Overhead – C (134,300 x 1.65)
To record overhead applied to production in the Construction Dept.
10.
Accounts Receivable
Construction Revenue
To record amount billed to state for the completed bridge.
221,595
Cost of Contracts Finished
Work In Process
To record the cost of completed jobs.
2,482,840
221,595
3,450,000
3,450,000
2,482,840
2. T – Accounts
3. Job Cost Sheet
Job Cost Sheet - Precast Department
Company Name: Lincoln Construction Company
Description of Job: Construction of Calamus River Bridge
Starting Date: October 1
Completion Date: November 7
Precast Department
Direct Materials (estimated):
$ 1,550,000
Date:
Source:
Direct Labor (estimated):
$220,000
Cost:
Date:
Source:
Cost:
Manufacturing Overhead (estimated):
$275,000
Date:
Source:
Cost:
10/1
Material issued for
production
$650,000
10/7
Paid Direct Labor
$45,000
10/9
Paid Overhead
Expenses
$150,000
11/2
Material issued for
production
$825,000
11/8
Paid Direct Labor
$115,000
11/9
Paid Overhead
Expenses
$98,750
$160,000
Total Cost:
Total Cost:
$ 1,475,000
Total Cost:
Cost Summary
Direct Materials
Remarks
$1,475,000
Direct Labor
$160,000
Manufacturing Overhead
$248,750
TOTAL COST
$248,750
$ 1,883,750
Job Cost Sheet - Construction Department
Company Name: Lincoln Construction Company
Description of Job: Construction of Calamus River Bridge
Starting Date: October 1
Completion Date: November 7
Construction Department
Direct Materials
Direct Labor
Manufacturing
(estimated):
$ 350,000
(estimated):
$ 130,000
Overhead
(estimated):
$ 214,500
Date:
11/4
Source:
Cost:
Material issued for
production
$200,000
Total Cost:
$200,000
Date:
Source:
Cost:
Date:
Source:
Cost:
10/7
Paid Direct Labor
$16,300
10/9
Paid Overhead
Expenses
$26,895
11/8
Paid Direct Labor
$134,300
11/9
Paid Overhead
Expenses
$221,595
$150,600
Total Cost:
Total Cost:
Cost Summary
$248,490
Remarks
Direct Materials
$200,000
Direct Labor
$150,600
Manufacturing Overhead
$248,490
TOTAL COST
$ 599,090
4. Discuss Lincoln Construction Company’s estimate relative to its actual costs.
- Both the Precast and Construction Departments of Lincoln Construction company have
overestimated the costs of their direct materials and direct labor. In terms of the Manufacturing
overheads of each department, the Construction Department have underapplied their
manufacturing overhead since the actual cost of the latter is higher than the applied/estimated
overhead. Overall, Lincoln Construction Company overestimated their costs for both
departments and they gained higher profit from the construction.