Question

Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations a. Materials purchased on account, $45,000. b. Materials requisitioned and factory labor used: Materials M Factory Lal Job 301 $ 1,850 $2.500 3.150 T220 2200 5,350 2.400 1.800 4.220 0.225 2.000 3.000 For general factory use 1.200 c. Factory overhead costs incurred on account, $1 800 d. Depreciation of machinery and equipment, $2.500 The factory overhead rate is $30 per machine hour Machine hoursused

Answer 1

Solution:

1.)Journal entries:

Transaction	Account Title and Explanation	Debit	Credit
a.	Raw materials inventory	$45,000
	Accounts payable		$45,000
	( To record the purchase raw materials)

b. 1.) Total direct materials =1850 + 3150+2200+1800+4230+1770 =$15,000

Transactions	Account Title and Explanation	Debit	Credit
b. 1.	Work in process	$15000
	Manufacturing overhead	$1200
	Raw materials inventory		$16200
	(To record the materials requisition)

b. 2.) Total direct labor =2500+ 7220+5350+2400+6225+2900 =$26,595

Transaction	Account Title and Explanation	Debit	Credit
b.2.)	Work in process	$26595
	Manufacturing overhead	$5000
	Wages payable		$31,595
	( To record the factory requisition)

c.)

Transaction	Account Title and Explanation	Debit	Credit
c.	Manufacturing overhead	$1800
	Accounts payable		$1800
	(To record the factory overhead costs)

d.

Transaction	Account Title and Explanation	Debit	Credit
d.	Manufacturing overhead	$2,500
	Accumulated Depreciation		$2,500
	(To record the depreciation of machinery and equipment)

e.) Total applied overhead =300 ×30 =$9,000

Transaction	Account Title and Explanation	Debit	Credit
e.	Work in process	9000
	Manufacturing overhead		9000
	( To record the total factory overhead rate per machine hour)

f.) Total cost of jobs completed:

	Direct materials	Direct labor	Manufacturing overhead	Total
Job 301	1850	2500	900	5250
Job 302	3150	7220	1800	12170
Job 303	2200	5350	1230	8780
Job 305	4230	6225	2100	12555
Total				38755

Transaction	Account Title and Explanation	Debit	Credit
f.	Finished goods	$38755
	Work in process		$38755
	(To record the jobs completed: 301,302,303 and 305

g. ) Total revenue = 8500+16150+13400 =$38050

Total cost = 5250+12170+8780 =$26,200

Transaction	Account Title and Explanation	Debit	Credit
g. 1	Account Receivable	$38050
	Sales Revenue		$38050
	(To record the total revenue)

Transaction	Account Title and Explanation	Debit	Credit
g. 2.	Cost of goods sold	$26200
	Finished goods		$26200
	(To record the total cost)

2.)

Work in process:

b. Raw materials inventory	$15000		Finished goods	$38,755
b. Wages payable	$26595
e. Manufacturing overhead	$9000
Balance	$11,840

Finished goods:

f. Work in process	$38755		g. Cost of goods sold	$26,200
Balance	$12,555

3.)

	Direct materials	Direct labor	Manufacturing overhead	Total
Job 304	$1800	$2400	$1890	$6090
Job 306	$1770	$2900	$1080	$5750
Total				$11,840

4.)

Job remaining in finished goods is job 305:

	Direct materials	Direct labor	Manufacturing overhead	Total
Job 305	$4,230	$6,225	$2,100	$12,555