Question

Widmer Watercraft's predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company's production activities during May 2017 follows. a. Purchased raw materials on credit, $200,000. b. Materials requisitions record use of the following materials for the month $ 48,000 32.000 19,209 22.400 Job 136 Job 137 Job 138 Job 139 Job 140 Total direct materials Indirect materials Total materials used 128,000 19.500 $147.500 nces c. Paid $15,000 cash to a computer consultant to reprogram factory equipment. d. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 Job 137 Job 138 Job 139 Job 140 Total direct labor Indirect labor Total $ 12,000 10,500 37,500 39,000 3.00 102,000 24.000 $126,000 e. Applied overhead to Jobs 136, 138, and 139 Transferred Jobs 136, 138, and 139 to Finished Goods g. Sold Jobs 136 and 138 on credit at a total price of $525.000 h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance)

Answer 1

1.

Job Cost Sheet
	Job No. 136	Job No. 137	Job No. 138	Job No. 139	Job No. 140	Total
Materials	48000	32000	19200	22400	6400	128000
Labor	12000	10500	37500	39000	3000	102000
Overhead	24000	21000	75000	78000	6000	204000
Total cost $	84000	63500	131700	139400	15400	434000

2.

Transaction	General Journal	Debit	Credit
a.	Raw materials inventory	200000
	Accounts payable		200000
	(To record raw materials purchased on credit)
b.	Work in process inventory	128000
	Factory overhead	19500
	Raw materials inventory		147500
	(To record materials requisitioned)
c.	Factory overhead	15000
	Cash		15000
	(To record factory overheads paid)
d.	Work in process inventory	102000
	Factory overhead	24000
	Cash		126000
	(To record payment of factory wages)
e.	Work in process inventory	177000
	Factory overhead		177000
	(To record factory overheads applied)
f.	Finished goods inventory	355100
	Work in process inventory		355100
	(To record jobs transferred to finished goods)
g(1)	Accounts receivable	525000
	Sales revenue		525000
	(To record jobs sold on credit)
g(2)	Cost of goods sold	215700
	Finished goods inventory		215700
	(To record cost of sales)
h.	Factory overhead	149500
	Accumulated depreciation-factory building		68000
	Accumulated depreciation-factory equipment		36500
	Prepaid insurance		10000
	Property taxes payable		35000
	(To record factory overheads incurred)
i.	Work in process inventory	27000
	Factory overhead		27000
	(To record factory overheads applied)

3.

Raw Materials Inventory
Beg. Bal.	0	147500	b.
a.	200000
End. Bal.	52500
Work in Process Inventory
Beg. Bal.	0	355100	f.
b.	128000
d.	102000
e.	177000
i.	27000
End. Bal.	78900
Finished Goods Inventory
Beg. Bal.	0	215700	g(2)
f.	355100
End. Bal.	139400
Factory Overhead
b.	19500	177000	e.
c.	15000	27000	i
d.	24000
h.	149500
End. Bal.	4000
Cost of Goods Sold
g(2)	215700
End. Bal.	215700

4.

Report of Job Costs
Work in Process Inventory
Job 137	63500
Job 140	15400
Balance	78900
Finished Goods Inventory
Job 139	139400
Balance	139400
Cost of Goods Sold
Job 136	84000
Job 138	131700
Balance	215700