Question

Instructions Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,800 of indirect materials and $11,100 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form: Job 301 Job 302 Direct materials $10,700 Direct materials $18,400 Direct labor 7,200 Direct labor 16,400 Factory overhead 6,192 Factory overhead 14,104 Total $24,092 Total $48,904 Job 303 Job 304 Direct materials $25,900 Direct materials $15,900 Direct labor 19,500 Direct labor 10,100 Factory overhead - Factory overhead - Required: Journalize the Jan 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles. a. Direct and indirect materials used b. Direct and indirect labor used. C. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). d. Completion of Jobs 301 and 302.

Answer 1

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
a.	Jan. 31	Work in process ($10700 + 18400 + 25900 + 15900)		70900
		Factory overhead		7800
		Materials			78700
b.	Jan. 31	Work in process ($7200 + 16400 + 19500 + 10100)		53200
		Factory overhead		11100
		Wages payable			64300
c.	Jan. 31	Work in process ($6192 + 14104 + 16770 + 8686)		45752
		Factory overhead			45752
d.	Jan. 31	Finished goods ($24092 + $48904)		72996
		Work in process			72996

Working:

Overhead rate:

Job 301: $6192/$7200 = 86% of direct labor cost

Job 302: $14104/$16400 = 86% of direct labor cost

Overhead applied:

Job 303: 86% x $19500 = $16770

Job 304: 86% x $10100 = $8686