Question

NE Waterways Problem 02 a-c Waterways has two major public park projects to provide with comprehensive irrigation in one of its service locations this month. Job 357 and Job K52 Involve 15 acres of landscaped terrain, which will require special-order, sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December. Raw materials were requisitioned from the company's Inventory on December 2 for $5,067; on December 8 for $1,065; and on December 14 for $3,459. In each instance, two-thirds (2/3) of these materials were for 357 and the rest for K52. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $17.5 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for 357 and the rest for K52. The predetermined overhead rate is based on machine hours. The expected machine hour use for the year is 2,097 hours, and the anticipated overhead costs are $830,412 for the year. The machines were used by workers on projects K52 and 57 on December 3, 9, and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hours were used for project 357 (2.5 the first day and 3 each of the other days). Both of these special orders were completed on December 15, producing 200 sprinkler heads for 357 and 100 sprinkler heads for K52. Additional job order activities during this period included: Dec. 1 Dec. 2 Dec 12 Dec 13 Dec. 18 Dec. 21 Dec. 31 Purchased raw materials from Durbin Supply Company on account for $53,400. Issued $40,300 of direct materials from the company's Inventory to jobs other than K52 and 57 and $3,100 of indirect materials. Paid Waterways' factory salaries and wages for $64,700. Paid the factory's water bill of $9,100. Transferred $50,300 of costs from other completed jobs to finished goods. Paid the factory's electric bill of $11.900 for Waterways factory, Made adjusting entries forth factory that included accrued property taxes of $12,100, prepaid insurance of $8,900, and accumulated depreciation of $16,100

Answer 1

Raw materials		Job No. J57	Job No. K52
2nd December	$ 5067	$ 3378	$ 1689
8th December	$ 1065	$ 710	$ 355
14th December	$ 3459	$ 2306	$ 1153
		$ 6394	$ 3197
Labour
3 December	$ 105	$ 70	$ 35
9 December	$ 105	$ 70	$ 35
15 December	$ 105	$ 70	$ 35
		$ 210	$ 105
Factory overhead Rate = $830412/2097 = $396 per hour
3 December		$ 792	$ 990
9 December		$ 792	$ 1188
15 December		$ 792	$ 1188
		$ 2376	$ 3366
Total cost		$8980	$6668
Total unit		200	100
Per unit cost		$44	$66

.

Date	Account tittle and description	Debit	Credit
2nd December	Work in progress     Raw material inventory (to assign material to job j57 and k52)	$ 5067	$ 5067
8th December	Work in progress     Raw material inventory (to assign material to job j57 and k52)	$ 1065	$ 1065
14th December	Work in progress     Raw material inventory (to assign material to job j57 and k52)	$ 3459	$ 3459
03 December	Work in progress     Factory payroll (to assign labour cost to jobs j57 and k52)	$ 105	$ 105
09 December	Work in progress     Factory payroll (to assign labour cost to jobs j57 and k52)	$ 105	$ 105
15 December	Work in progress     Factory payroll (to assign labour cost to jobs j57 and k52)	$ 105	$ 105
01 December	Raw material Account payable (raw material purchased on account)	$ 53400	$ 53400
02 December	Work in progress Raw material inventory (to assign material to job)	$ 40300	$ 40300
02 December	Overhead Raw material inventory	$ 3100	$ 3100
12 December	Factory payroll Cash (payment of labor)	$ 64700	$ 64700
13 December	Overhead Cash (water bill payment)	$ 9100	$ 9100
18 December	Finished goods inventory Work in progress (transferred work in progress into finished goods)	$ 50300	$ 50300
21 December	Overhead Cash (electricity bill payment)	$ 11900	$ 11900
31 December	Overhead Tax payable Prepaid insurance Accumulated depreciation (other overhead)	$ 37100	$ 12100 $ 8900 $16100
	Finished goods inventory Work in progress	$ 15648	$ 15648

.

Overhead are under applied

           

Cost of goods sold	$ 3600
Manufacturing overhead		$ 3600