Question

In January, Dieker Company requisitions raw materials for production as follows: Job 1 $920, Job 2 $1,170, Job 3 $770, and general factory use $650. During January, time tickets show that the factory labor of $6,300 was used as follows: Job 1 $2,400, Job 2 $1,700, Job 3 $1,520, and general factory use $680. Prepare the job cost sheets for each of the three jobs.
Job 1
Date Direct Materials Direct Labour
1/31 900 2,200
Date Direct Materials Direct Labour
1/31 1,200 1,600
Date Direct Materials Direct Labour
1/31 700 1,400
Sam Bowden believes actual manufacturing overhead should be charged to jobs. Do you agree?

Answer 1

Answer:

No, Actual manufacturing overhead should not be charged to jobs

Explanation:

Only overheads applied using the pre-determined overheads rate should be charged to the jobs. This is because, charging actual manufacturing overhead to the jobs delays the product costing exercise which needs to be done earlier in the month. The Actual costs are only available at the end of the month.