Question

Analyze a job cost sheet and prepare entries for manafacturing costs. 2.3 101,2, 3, 4), AP A job order cost sheet for Ryan Company is shown below Job No. 92 For 2,000 Units Direct Materials Direct Manufacturing Date Labor 6,000 8,000 4,000 18,000 Overhead 4,200 6,400 3,200 Beg. bal. Jan. 1 5,000 6,000 12 25 27 2,000 13,000 13,800 Cost of completed job: Direct materials Direct labor Manufacturing overhead $13,000 18,000 13,800 $44,800 Total cost Unit cost ($44,800+ 2,000) $22.40 Exercises 2-33 Instructions 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? 2. If manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used in each year? b. Prepare summary entries at January 31 to record the current year's transactions pertaining to Job No. 92

Answer 1

a1) Balance in work in process January 1 = 5000+6000+4200 = $15200

a2) Overhead rate

Previous year = 4200/6000 = 70% of direct labor cost

Current year = 6400/8000 = 80% of direct labor cost

b) Journal entry

Date	account and explanation	debit	credit
Jan 31	Finished goods inventory	44800
	Work in process inventory		44800
	(To record finished goods)