Question

Waterways has two major public park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain, which will require special-order, sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December. Raw materials were requisitioned from the company's inventory on December 2 for $5,094; on December 8 for $1,056; and on December 14 for $3,468. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $15.5 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for $57 and the rest for K52. The predetermined overhead rate is based on machine hours. The expected machine hour use for the year is 2,115 hours, and the anticipated overhead costs are $854,460 for the year. The machines were used by workers on projects K52 and J57 on December 3, 9, and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hours were used for project J57 (2.5 the first day and 3 each of the other days). Both of these special orders were completed on December 15, producing 200 sprinkler heads for 357 and 100 sprinkler heads for K52. Additional job order activities during this period included: Dec. 1 Purchased raw materials from Durbin Supply Company on account for $53,400. Dec. 2 Issued $40,300 of direct materials from the company's inventory to jobs other than K52 and J57 and $3,100 of indirect materials. Dec. 12 Paid Waterways' factory salaries and wages for $65,500. Dec. 13 Paid the factory's water bill of $9,100. Dec. 18 Transferred $50,200 of costs from other completed jobs to finished goods. Dec. 21 Paid the factory's electric bill of $12,000 for Waterways' factory. Dec. 31 Made adjusting entries forth factory that included accrued property taxes of $12,100, prepaid insurance of $8,700, and accumulated depreciation of $16,000.

Answer 1

		J57	K52
Raw materials
2nd DECEMBER	$                  5,094	$        3,396	$        1,698
8th DECEMBER	$                  1,056	$           704	$           352
14th DECEMBER	$                  3,468	$        2,312	$        1,156
		$        6,412	$        3,206
Labor
03-Dec	$                        93	$              62	$              31
09-Dec	$                        93	$              62	$              31
15-Dec	$                        93	$              62	$              31
		$           186	$              93
Factory Overhead
rate = $854460/2115 = $404 per hour
03-Dec		$           808	$        1,010
09-Dec		$           808	$        1,212
15-Dec		$           808	$        1,212
		$        2,424	$        3,434
Total Costs		$        9,022	$        6,733
total Units		200	100
Per unit cost		$              45	$              67

DATE	ACCOUNT TITLE AND DESCRIPTION	DEBIT	CREDIT
2nd DECEMBER	WORK IN PROGRESS	$          5,094
	RAW MATERIAL INVENTORY		$          5,094
8th DECEMBER	WORK IN PROGRESS	$          1,056
	RAW MATERIAL INVENTORY		$          1,056
14th DECEMBER	WORK IN PROGRESS	$          3,468
	RAW MATERIAL INVENTORY		$          3,468
	(TO ASSIGN MATERIAL TO JOBS J57 AND K52)
03-Dec	WORK IN PROGRESS	$                93
	FACTORY PAYROLL		$                93
09-Dec	WORK IN PROGRESS	$                93
	FACTORY PAYROLL		$                93
15-Dec	WORK IN PROGRESS	$                93
	FACTORY PAYROLL		$                93
	(TO ASSIGN LABOR COST TO JOBS J57 AND K52)
03-Dec	WORK IN PROGRESS	$          1,818
	OVERHEAD		$          1,818
09-Dec	WORK IN PROGRESS	$          2,020
	OVERHEAD		$          2,020
15-Dec	WORK IN PROGRESS	$          2,020
	OVERHEAD		$          2,020
	(TO ASSIGN APPLIED OVERHEAD TO JOBS J57 AND K52)
01-Dec	RAW MATERIAL	$        53,400
	ACCOUNTS PAYABLE		$        53,400
	RAW MATERIAL PURCHASED ON ACCOUNT)
02-Dec	WORK IN PROGRESS	$        40,300
	RAW MATERIAL INVENTORY		$        40,300
	(TO ASSIGN MATERIAL TO JOBS )
02-Dec	OVERHEAD	$          3,100
	RAW MATERIAL INVENTORY		$          3,100
	(TO ASSIGN INDIRECT MATERIAL TO JOBS)
12-Dec	FACTORY PAYROLL	$        65,500
	CASH		$        65,500
	(PAYMENT OF LABOR)
13-Dec	OVERHEAD	$          9,100
	CASH		$          9,100
	(WATER BILL PAYEMNT)
18-Dec	FINISHED GOODS INVENTORY	$        50,200
	WORK IN PROGRESS		$        50,200
	(TRANSFERRED WORK IN PROGRESS TO FINISHED GOODS)
21-Dec	OVERHEAD	$        12,000
	CASH		$        12,000
	ELECTRICITY BILL PAYMENT
31-Dec	OVERHEAD	$        36,800
	TAX PAYABLE		$        12,100
	PREPAID INSURANCE		$          8,700
	ACCUMULATED DEPRECIATION		$        16,000
	(OTHER OVERHEAD)
	FINISHED GOODS INVENTORY	$        15,755
	WORK IN PROGRESS		$        15,755
	(TRANSFERRED WORK IN PROGRESS TO FINISHED GOODS FOR JOB J57 AND K52)

OVERHEAD ARE UNDER APPLIED,

COST OF GOODS SOLD	$                  3,600
MANUFACTURING OVERHEAD		$        3,600