Question

Exercise 20-2 Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,650 and two jobs in process: Job No. 429 $2,290, and Job No. 430 $1,360. During May, a summary of source documents reveals the following. Materials Labor Time Tickets Job Number Requisition Slips 429 $2,950 $2,410 3,440 430 4,000 431 4,740 $11,690 8,080 $13,930 General use 900 1,750 $12,590 $15,680 Stine Company applies manufacturing overhead to jobs at an overhead rate of 63% of direct labor cost. Job No. 429 is completed during the month.

Answer 1

1)

No.	Date	Account titles and explanation	Debit	Credit
1)	May 31	Work in Process inventory	$11690
		Manufacturing overhead	$900
		Raw materials inventory		$12590
2)	May 31	Work in Process inventory	$13930
		Manufacturing overhead	$1750
		Factory labor		$15680
3)	May 31	Work in Process inventory (13930*63%)	$8776
		Manufacturing overhead		$8776
4)	May 31	Finished goods inventory	$9168
		Work in Process inventory		$9168

Finished goods inventory= Job 429= Beginning balance+Direct materials+Direct labor+Manufacturing overhead

= $2290+2950+2410+(2410*63%)= $9168

2)

Work in Process Inventory
May 1 Balance	$3650	May 31	9168
May 31	11690
May 31	13930
May 31	8776
May 31 Balance	$28878

3)

Job Cost Sheets
Job No.	Beginning Work in Process	Direct Materials	Direct Labor	Manufacturing Overhead	Total
430	$1360	$4000	$3440	(3440*63%)= $2167.20	$10967.20
431		4740	8080	(8080*63%)= 5090.40	17910.40
	$1360	$8740	$11520	$7258	$28878

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