Question UPDATED (3 parts)

Waterways has two major public-park projects to provide withcomprehensive irrigation in one of its service locations thismonth. Job J57 and Job K52 involve 15 acres of landscaped terrain,which will require special-order, sprinkler heads to meet thespecifications of the project. Using a job cost system to producethese parts, the following events occurred during December.

Raw materials were requisitioned from the company’s inventory onDecember 2 for $ 5,064; on December 8 for $ 1,068; and on December14 for $ 3,450. In each instance, two-thirds (2/3) of thesematerials were for J57 and the rest for K52.

Six time tickets were turned in for these two projects for a totalamount of 18 hours of work. All the workers were paid $ 17.5 perhour. The time tickets were dated December 3, December 9, andDecember 15. On each of those days, 6 labor hours were spent onthese jobs, two-thirds (2/3) for J57 and the rest for K52.

The predetermined overhead rate is based on machine hours. Theexpected machine hour use for the year is 2,093 hours, and theanticipated overhead costs are $ 837,200 for the year. The machineswere used by workers on projects K52 and J57 on December 3, 9, and15. Six machine hours were used for project K52 (2 each day), and8.5 machine hours were used for project J57 (2.5 the first day and3 each of the other days). Both of these special orders werecompleted on December 15, producing 200 sprinkler heads for J57 and100 sprinkler heads for K52.

Additional job order activities during this period included:

Dec.	1		Purchased raw materials from Durbin Supply Company on accountfor $ 53,100.
Dec.	2		Issued $ 40,400 of direct materials from the company’sinventory to jobs other than K52 and J57 and $ 3,000 of indirectmaterials.
Dec.	12		Paid Waterways’ factory salaries and wages for $ 65,100.
Dec.	13		Paid the factory’s water bill of $ 8,900.
Dec.	18		Transferred $ 50,500 of costs from other completed jobs tofinished goods.
Dec.	21		Paid the factory’s electric bill of $ 12,000 for Waterways’factory.
Dec.	31		Made adjusting entries forthfactory that included accrued property taxes of $ 11,900, prepaidinsurance of $ 8,700, and accumulated depreciation of $15,900.

Part 1

Set up the job cost sheets for Job No. J57 and Job No. K52.Determine the total cost for each manufacturing special order forthese jobs. (Round unit costs to 2 decimal places, e.g.12.25.)

		Job No. J57		Job No. K52
Total Cost		$		$
Unit Cost		$		$

Part 2

Journalize the activities from these job cost sheets in thegeneral journal. Also, journalize the other costs that occurredduring this period. (Credit account titles areautomatically indented when amount is entered. Do not indentmanually. Record journal entries in the order presented in theproblem. Round answers to 0 decimal places, e.g.5,275.)

Date	Account Titles and Explanation	Debit	Credit
	(To assign materials to jobs J57 & K52)
12/2
	(To assign materials to jobs and overhead)
	(To assign labor to jobs J57 & K52)
	(To assign overhead to jobs J57 & K52)
	(To assign labor to jobs J57 & K52)
	(To assign overhead to jobs J57 & K52)
	(To assign labor to jobs J57 & K52)
	(To assign overhead to jobs J57 & K52)
	(To record completion of jobs J57 & K52)

Part 3

Assuming that Manufacturing Overhead has a debit balance of $3,600, determine whether overhead has been under/over applied andmake the adjusting entry. (Credit account titles areautomatically indented when amount is entered. Do not indentmanually.)

Date	Account Titles and Explanation	Debit	Credit