Blumhardt’s Barbeque Grills builds customized barbeque grills

Individual Project 1 Job Costing – 25 points Due in class February 15th Blumhardt’s Barbeque Grills builds customized barbeque grills. All grills goes through two production departments: Building (BLD) and Painting ( ...

Individual Project 1 Job Costing – 25 points Due in class February 15th Blumhardt’s Barbeque Grills builds customized barbeque grills. All grills goes through two production departments: Building (BLD) and Painting (PNT). The company uses a normal, job-order costing system, and overhead is applied using departmental rates. The rate for BLD is $15 per machine hour (MH) and the rate for PNT is $12.75 per direct labor hour (DLH). Company policy is to close any over- or underapplied overhead directly to Cost of Goods Sold at the end of each month. You will receive a packet containing job cost reports and copies of selected source documents for the month of February. At the beginning of the month, two jobs were already in production (#501 and #502). During February, two additional jobs were started (#503 and #504). Required: 1. Complete the company’s Job Cost Reports using the information provided in the packet. 2. Calculate the following amounts for the month of February: Ending Work-in-Process balance Cost of goods manufactured Over-/underapplied overhead Cost of goods sold AFTER adjusting for any over-/underapplied overhead 3. Prepare an income statement for February. The company’s income tax rate is 35% 4. Answer the following questions: Why would a business choose to use a predetermined (estimated) overhead rate instead of an actual overhead rate? A more accurate method for disposing of over-/underapplied overhead is to prorate it among work-inprocess inventories, finished goods inventories and Cost of Goods Sold. Do you think Blumhardt’s Barbeque Grills is justified in using the direct write-off approach instead? Why or why not? 5. Turn in the following Completed job cost reports Answers to parts 2, 3, and 4 (must be typed) All supporting calculations (may be handwritten) 6. Turn in group evaluation (if applicable) – 1 per person. For each person in your group (including yourself), evaluate participation as follows: 4 – did at least their fair share 3 – did slightly less than their fair share 2 – did significantly less than their fair share 1 – meant to participate but never showed up 0 – who? BONUS OPPORTUNITY: 5 points for best in class; 10 points for best overall Blumhardt’s Barbeque Grills: Job Cost Sheet Job #: 501 Description: Date Started: Date Req# Date Completed: 35 Grills for Bolmer’s Backyard Grills Direct Material Direct Labor Dept Hrs Rate $1,250 Jan 29 BLD 120 $13.00 Jan 29 Jan 21 R1219 Amount Date 1/20/16 PNT 80 $18.00 Manufacturing Overhead Amount Date Dept Base Hrs Rate Amount $1,560 Jan 29 BLD MH 100 $15.00 $1,500 $1,440 Jan 29 PNT DLH 80 $12.75 $1,020 Completed Job Cost: $ Date Sold: Blumhardt’s Barbeque Grills: Job Cost Sheet Job #: 502 Description: Date Started: 60 Grills for Hudson’s Hamburgers Direct Material Date Req# Jan 25 R1220 Amount Date Completed: Direct Labor Date $2,750 Jan 29 1/25/16 Dept Hrs Rate BLD 70 $13.00 Manufacturing Overhead Amount Date $910 Jan 29 Dept Base Hrs Rate BLD MH 80 Amount $15.00 Completed Job Cost: $ Date Sold: $1,200 Blumhardt’s Barbeque Grills: Job Cost Sheet Job #: 503 Date Started: Description: Date Completed: Direct Material Date Req# Amount Direct Labor Date Dept Hrs Rate $ Manufacturing Overhead Amount Date Dept Base Hrs Rate $ Amount $ Completed Job Cost: $ Date Sold: Blumhardt’s Barbeque Grills: Job Cost Sheet Job #: 504 Date Started: Description: Date Completed: Direct Material Date Req# Amount $ Direct Labor Date Dept Hrs Rate Manufacturing Overhead Amount Date Dept Base Hrs $ Rate Amount $ Completed Job Cost: $ Date Sold: Selected Source Documents for February Materials Requisition Date 2/01/16 Date 2/19/16 #R1221 Description Materials Requisition Metal – for Job 502 Description Paint – for Job 503 Selected February Amount #R1227 $3,010 Amount $4,580 4822 Blumhardt’s Barbeque Grills PAY TO THE ORDER OF DATE Rao’s Repairs Inc PAY TO THE ORDER OF XYZ Bank 2/2/16 DATE Blumhardt’s Barbeque Grills 2/22/2016 3,500 $ Westar Energy XYZ Bank MEMO Factory MEMO Maintenance 4823 $ 8,000 Bi-Weekly Payroll Summary Pay Period Ending: 2/26/2016 Bi-Weekly Payroll Summary Pay Period Ending: 2/12/2016 Dept BLD: Job #503 350 hrs @ $13.00/hr 60 Dept BLD: Job #501 180Job #504 hrs @ $13.00/hrhrs @ $13.00/hr Dept PNT: Job #502 280 hrs @ $18.00/hr Idle time $86 Idle time $137 Plant supervisor $2,500 Plant supervisor $2,500 Administrative salaries $1,270 Administrative salaries $1,270 Yang Xu, CPA 4824 Blumhardt’s Barbeque Grills Job Machine Hours 2/28/16 DATE #501 190 BLD Machine Hour Summary #502 Ending: 2/26/16 160 PAY TO THE Job # Description ConklinPeriod Management Property 5,700 $ ORDER OF Production Order #503 200 503 120 Grills for Krattli’s Koolers INC Job Machine Hours XYZ Bank Job # Description #503 220 504 15 Grills for Davis’ Dawgs Yang Xu, CPA MEMO Factory Rent: $3,000 #504 20 Admin Office Rent: $2,700 Requisition LLC Materials #R1224 Materials Requisition #R1222 Date Inventory Move Authorization Amount Description 2/5/16 Metal#– for Job Move To $6,450 503 Date Job 2/24/16 503 Date 2/15/16 Finished Goods Materials Requisition #R1223 Materials Requisition #R1228 Date Description Amount Date Description Amount 2/8/16 Paint – for Job 502 $1,090 2/26/1 Metal – For Job 504 $850 6 2/28/16 Recorded depreciation on manufacturing equipment $2,500 2/16/16 2/16/16 501 502 Finished Goods Total Finished Goods Description Various Production Supplies Amount $5,366 Invoice 152 2/17/2016 Sold To: Bolmer’s Backyard Grills Description Job #501: 35 Barbeque Grills Total Total Amt. $28,000 $28,000 Materials Requisition Date Invoice 153 2/18/16 2/27/2016 Sold To: Hudson’s Hamburgers Inventory Move Authorization Description Job #502: 60 Grills To Date Job # Move #R1225 Lawrence, KS · 785.555.1234 Description Amount Metal – for Job 503 $3,930 Blumhardt’s Barbeque Grills Lawrence, KS · 785.555.1234 Materials Requisition Blumhardt’s Barbeque Grills BLD Machine Hour Summary Period Ending: 2/12/2016 Yang Xu, CPA Factory: $6,000 Admin: $2,000 Production Order Date 2/5/16 Date 2/22/16 Job #502 140 hrs @ $13.00/hr Dept PNT: Job @ $13.00/hr Job #503 370 hrs#502 120 hrs @ $18.00/hr Date Job #503 240 hrs @ $18.00/hr 2/17/16 Job #501 240 Job @ $18.00/hr @ $18.00/hr hrs #504 40 hrs Source Documents for Total Amt. $48,000 $48,000 #R1226 Description Various Production Supplies Amount $1,000