Question

A job order cost sheet for Ryan Company is shown below. Job No. 92 For 2,000 Units Date Direct Materials Direct Labor Manufacturing Overhead Beg. bal. Jan. 1 6,500 6,000 4,200 6,000 8,000 6,800 25 3,000 4,000 18,000 15,500 3,400 14,400 Cost of completed job: Direct materials Direct labor Manufacturing overhead Total cost Unit cost (547,900 = 2.000) $15,500 18,000 14,400 $47.900 $23.95 (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 if this was the only unfinished job? Balance in Work in Process Inventory on January 1 (2) Il manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used in each year? (Round answers to decimal places,

Answer 1

		Direct	Direct	MOH
Job 92		Materials	labor
Beginning bal	1-Jan	6,500	6,000	4,200	16,700
cost added		9000	12,000	10,200	31200
total cost		15,500	18,000	14,400	47,900
1)	Balance in Work in process inventory on January 1					16,700
			last	Current
2)			year	year
	overhead rate		70%	85%
	(overhead rate = MOH/direct labor cost)
b)	Date	Account titles & Explanations				Debit	Credit
	31-Jan	Work in process inventory				9000
		Raw materials inventory					9000
	31-Jan	Work in process inventory				12,000
		Factory wages payable					12,000
	31-Jan	work in process inventory				10,200
		Manufacturing overhead					11,840
	31-Jan	Finished goods				47,900
		Work in process inventory					47,900