Question

Sager Company manufactures variations of its product, a technopress, in response to custom orders from its customers. On May 1, the company had no inventories of work in process or finished goods but held the following raw materials. Material M Material R Paint Total cost 250 units 140 units 85 units @ $260 = @ 220 = @ 105 = $ 65,000 30,800 8,925 $104,725 On May 4, the company began working on two technopresses: Job 102 for Worldwide Company and Job 103 for Reuben Company. a. Purchased raw materials on credit and recorded the following information from receiving reports and invoices. Receiving Report No. 426, Material M, 260 units at $260 each. Receiving Report No. 427, Material R, 135 units at $220 each. Record these purchases with a single journal entry. Enter the receiving report information on the materials ledger cards. b. Requisitioned the following raw materials for production. Requisition No. 35, for Job 102, 135 units of Material M. Requisition No. 36, for Job 102, 72 units of Material R. Requisition No. 37, for Job 103, 70 units of Material M. Requisition No. 38, for Job 103, 106 units of Material R. Requisition No. 39, for 23 units of paint.

Answer 1

MATERIAL LEDGER CARD
Item	Material M
Received	Issued	Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requisition	Units	Unit Price	Total Price	Units	Unit Price	Total Price
May 1		250	$260	$65,000					250	$260	$65,000
May 4	426	260	$260	$67,600					510	$260	$132,600
					35	135	$260	$35,100	375	$260	$97,500
					37	70	$260	$18,200	305	$260	$79,300
MATERIAL LEDGER CARD
Item	Material R
Received	Issued	Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requisition	Units	Unit Price	Total Price	Units	Unit Price	Total Price
May 1		140	$220	$30,800					140	$220	$30,800
May 4	427	135	$220	$29,700					275	$220	$60,500
					36	72	$220	$15,840	203	$220	$44,660
					38	106	$220	$23,320	97	$220	$21,340
MATERIAL LEDGER CARD
Item	Paint
Received	Issued	Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requisition	Units	Unit Price	Total Price	Units	Unit Price	Total Price
May 1		85	$105	$8,925					85	$105	$8,925
					39	23	$105	$2,415	62	$105	$6,510
Customer's Name	Worldwide Company			Job No.	102
	Direct Materials	Direct Labor	Overhead Costs Applied
Requisition Number	Amount	Time Ticket Number	Amount	Rate %	Amount
36	35100	1 to 10	84000	0.8	67200
38	18200
	53300		84000		67200
Summary of Costs
Direct Materials	53300
Direct Labor	84000
Overhead Costs	67200
Total Costs	204500
Customer's Name	Reuben Company			Job No.	103
	Direct Materials	Direct Labor	Overhead Costs Applied
Requisition Number	Amount	Time Ticket Number	Amount	Rate %	Amount
35	15840	11 to 30	63000	0.8	50400
37	23320
	39160		63000		50400
Summary of Costs
Direct Materials	39160
Direct Labor	63000
Overhead Costs	50400
Total Costs	152560
No.	Transaction	General Journal	Debit	Credit
1	a.	Raw Material Inventory - Material M	$67,600
		Raw Material Inventory - Material R	$29,700
		Account Payable		$97,300
		(to record purchase of raw material on credit)
2.	b.	Work in Process Inventory - Job 102	$53,300
		Work in Process Inventory - Job 103	$39,160
		Raw Material Inventory - Material M		$35,100
		Raw Material Inventory - Material R		$15,840
		Raw Material Inventory - Material M		$18,200
		Raw Material Inventory - Material R		$23,320
		(to record the requisition of raw materials for Jobs 102 & 103)
3.	c.	Work in Process Inventory - Job 102	$84,000
		Work in Process Inventory - Job 103	$63,000
		Factory Wages Payable		$84,000
		Factory Wages Payable		$63,000
		(to record the direct labor costs to Jobs 102 & 103)
4.	c.	Manufacturing Overhead	$136,165
		Supplies - Paints		$2,415
		Factory Wages Payable - Repairs		$23,750
		Miscellaneous		$110,000
		(to record the indirect materials,indirect labor and other overheads)
5.	d.	Factory Wages Payable	$170,750
		Manufacturing Overheads Payable	$110,000
		Cash		$280,750
		(to record the payment of direct labor and overheads(
6.	e.	Work in Process Inventory - Job 102	$67,200
		Manufacturing Overheads		$67,200
		(to allocate the overheads to Job 102)
7.	e.	Finished Goods	$204,500
		Work in Process Inventory - Job 102		$204,500
		(to transfer the finsihed goods transferred for Job 102)
8.	f.	Cost of Goods Sold	$204,500
		Finished Goods		$204,500
		(to record the delivery of finished goods)
9.	f.	Accounts Receivable	$530,000
		Sales		$530,000
		(to record the sale of goods for Job 102)
8.	g.	Work in Process Inventory - Job 103	$50,400
		Manufacturing Overhead		$50,400
		(to allocate the overheads to Job 103)