Question

Exercise 2-3 A job order cost sheet for Ryan Company is shown below. Job No. 92 Direct Materials Direct Labor For 2,000 Units Manufacturing | Overhead Date Beg. bal. Jan. 1 6,700 7,000 4,900 7,000 10,000 7,500 2,800 4,000 21,000 3,000 15,400 16,500 Cost of completed job: Direct materials Direct labor Manufacturing overhead Total cost Unit cost ($52,900 + 2,000) $16,500 21,000 15,400 $52,900 $26.45 (a) On the basis of the foregoing data, answer the following questions. (1) What was the balance in Work in Process Inventory on January 1 if this was the only unfinished job? Balance in Work in Process Inventory on January 1

Answer 1

(1) What was the balance in Work in Process Inventory on January 1 if this was the only unfinished job?
Balance in Work in Process Inventory on January 1: (6700 + 7000 + 4900)	$                                                       18,600.00
(2) If manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used in each year?
	Last year	Current year
Overhead rate	70.00%	75.00%
Last Year  = MO/ DL = (4900/7000
Current Year = 3000/4000
(b) Prepare summary entries at January 31 to record the current years transactions pertaining to Job No. 92.
Date	Account Titles and Explanation	Debit	Credit
Jan. 31	Work in Process Inventory (7000 + 2800)	9,800
	Raw Materials Inventory		9,800
	(To record materials used)
	Work in Process Inventory (10000 + 4000)	14,000
	Factory Labor		14,000
	(To record factory labor used)
	Work in Process Inventory (7500 + 3000)	10,500
	Manufacturing Overhead		10,500
	(To record manufacturing overhead)
	Finished Goods Inventory	$ 52,900.00
	Work in Process Inventory		$ 52,900.00
	(To record job completed)