P17-26A Lu Technology, Co., manufactures CDs and DVDs for computer software and entertainment

Price: $5.99


P17-26A
Preparing and using a job cost record
Lu Technology, Co., manufactures CDs and DVDs for computer software and entertainment companies. Lu uses job order costing and has a perpetual inventory system.
On April 2, Lu began production of 5,900 DVDs, Job 423, for Stick People Pictures for $1.30 sales price per DVD. Lu promised to deliver the DVD’s to Stick People by April 5. Lu incurred the following costs:
Date Labor Time Record No. Description Amount
4/2 655 10 hours @ $14 $ 140
4/3 656 20 hours @ $13 260
Materials
Requisition
Date No. Description Amount
4/2 63 31 lbs, polycarbonate plastic @ $11 $341
4/2 64 25 lbs. acrylic plastic @ $27 675
4/3 74 3 lbs. refined aluminum @ $42 126
Stick People provides the movie file for Lu to burn onto the DVD’s at a cost of $0.50 per DVD. Lu Technology allocates manufacturing overhead to jobs base on the relation between estimated overhead of $540,000 and estimated direct labor cost of $432,000. Job 423 was completed and shipped on April 3.
Requirements:
1. Prepare a job cost record similar to Exhibit 17-6 for job 423. Calculate the pre-determined overhead rate; then allocate manufacturing overhead to the job.
2. Journalize in summary form the requisition of direct material (including the movie files) and the assignment of direct labor and manufacturing overhead to Job 423.
3. Journalize completion of the job and the sale of the 5,900 DVD’s.