Question

Exercise 15-03 A job order cost sheet for Ryan Company is shown below. Job No. 92 Direct Materials Direct Labor For 2,000 Units Manufacturing Overhead Date Beqbal 7,000 4,900 7,000 7,000 10,000 7,500 2,500 5,000 3,750 16,150 16,500 22,000 $16,500 Cost of completed job Direct materials Direct labor Manufacturing overhead Total cost Unit cost (554,650 + 2,000) 22,000 16,150 $54,650 $27.33 (a) On the basis of the foregoing data, answer the following questions. (1) What was the balance in Work in Process Inventory on January 1 this was the only unfinished job? Balance in Work in Process inventory on January 1s decimal places, . ..) (2) manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used in each year? (Round answers to Last year Current year Overhead rate s are automatically indented when amount is entered De () Prepare summary entries at January 31 to record the current year's transactions pertaining to Job No. 92. (Credit account not indent manually.)

Answer 1

1) Balance in work in process inventory January 1 = 7000+7000+4900 = 18900

2) Overhead rate

	Last year	Current year
Overhead rate	4900/7000 = 70%	7500/10000 = 75%

3) Journal entries

Date	Account and explanation	Debit	Credit
Jan 31	Work in process	9500
	Raw material		9500
	(To record direct material used)
Jan 31	Work in process	15000
	Wages payable		15000
	(To record factory labor used)
Jan 31	Work in process	11250
	Manufacturing overhead		11250
	(To record manufacturing overhead)
Jan 31	Finished goods	54650
	Work in process		54650
	(To record jobs completed)