Question

Job Costs, Ending Work in Process

During March, Aragon Company worked on three jobs. Data relating to these three jobs follow:

		Job 78		Job 79		Job 80
Units in each order		110		160		290
Units sold		—		160		—
Materials requisitioned		$770		$720		$3,161
Direct labor hours		121		176		493
Direct labor cost		$1,573		$2,816		$4,141

Overhead is assigned on the basis of direct labor hours at a rate of $7.60 per direct labor hour. During March, Jobs 78 and 79 were completed and transferred to Finished Goods Inventory. Job 79 was sold by the end of the month. Job 80 was the only unfinished job at the end of the month.

1. Calculate the per-unit cost of Jobs 78 and 79. Round your answers to the nearest cent.

Job 78	$___ per unit
Job 79	$___ per unit

2. Compute the ending balance in the work-in-process inventory account. Round your answer to the nearest cent.

$____

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3. Prepare the journal entries reflecting the completion of Jobs 78 and 79 and the sale of Job 79. The selling price is 120 percent of cost. Round your answers to the nearest cent.

Completion of Jobs 78 & 79	Finished Goods	___
	Work in Process		____
Sale of Job 79 (cost)	Cost of Goods Sold	____
	Finished Goods		_____
Sale of Job 79 (sale)	Accounts Receivable or Cash	____
	Sales Revenue		____

Answer 1

1) Job 78 Job 79 29.66 per unit 30.46 per unit Working Notes $ Direct materials Direct labor cost Overhead Total Cost (a) No of units (b) Cost per unit (a/b) Job 78 770.00 $ 1,573.00 919.60 3,262.60 $ 110 29.66 $ Job 79 720.00 2,816.00 1,337.60 4,873.60 160 30.46 Overhead Direct labor hours (a) Overhead (a * $ 7.60) Job 78 121 919.60 Job 79 176 1,337.60

2) Ending Balance, Work in Process $ 11,048.80 Working Notes $ Direct materials Direct labor cost Overhead Total Cost (a) Job 80 3,161.00 4,141.00 3,746.80 11,048.80 $ Overhead Direct labor hours (a) Overhead (a $ 7.60) Job 80 493 3,746.80 Credit Event Completion of Jobs 78 & 79 Debit 8,136.20 8,136.20 Sale of Job 79 (cost) Account Finished Goods Work in Process (3,262.60 + 4,873.60) Cost of goods sold Finished Goods Accounts receivable or cash Sales revenue (4,873.60 x 120%) 4,873.60 4,873.60 Sale of Job 79 (Sale) 5,848.32 5,848.32