Question

Jurvin Enterprises is a manufacturing company that had no beginning inventories. A subset of the transactions that it recorded during a recent month is shown below. a. $76,000 in raw materials were purchased for cash. b. $72,400 in raw materials were used in production. Of this amount, $65,300 was for direct materials and the remainder was for indirect materials c. Total labor wages of $151,600 were incurred and paid. Of this amount, $133,700 was for direct labor and the remainder was for indirect labor. d. Additional manufacturing overhead costs of $126,500 were incurred and paid. e. Manufacturing overhead of $128,500 was applied to production using the company's predetermined overhead rate. f. All of the jobs in process at the end of the month were completed. 9. All of the completed jobs were shipped to customers. h. Any underapplied or overapplied overhead for the period was closed to cost of Goods Sold. Required: 1. Post the above transactions to T-accounts. 2. Determine the adjusted cost of goods sold for the period. Complete this question by entering your answers in the tabs below. Required 1 Required 2

Answer 1

Answer -

1. Answer -

Cash Beg. bal. $76,000 a. $151,600 c. $126,500 d. End. bal. $354,100

Calculation:

Ending balance = Raw materials purchased + Total labor paid + Manufacturing overhead paid

= $76,000 + $151,600 + $126,500

= $354,100 (credit balance)

Raw materials Beg. bal. a. $76,000 $72,400 b. End. bal. $3,600

Calculation:

Ending balance = Raw materials purchased - Raw materials used in production

= $76,000 - $72,400

= $3,600 (debit balance)

Work in process Beg. bal. b. c. e. $65,300 $327,500 f. $133,700 $128,500 End. bal. $0

Calculation:

= Direct materials + Direct labor + Applied manufacturing overhead

= $65,300 + $133,700 + $128,500

= $327,500

Here, all work in process inventory at the end of month transfer to finished goods inventory. Therefore, ending balance is zero.

Finished goods Beg. bal. f. $327,500 $327,500 g. End. bal. $0

Explanation:

Here, all finished goods inventory were shipped to customers.

Manufacturing overhead Beg. bal. b. $7,100 $128,500 c. $17,900 $23,000 h. d. $126,500 End. bal. $0

Calculation:

Indirect materials = Raw materials used in production - Direct materials

= $72,400 - $65,300

= $7,100

Indirect labor = Total labor wages - Direct labor

= $151,600 - $133,700

= $17,900

Now,

Actual manufacturing overhead costs = Indirect materials + Indirect labor + Additional manufacturing overhead costs

= $7,100 + $17,900 + $126,500

= $151,500

Underapplied overhead = Actual manufacturing overhead costs - Applied manufacturing overhead costs

= $151,500 - $128,500

= $23,000

Cost of goods sold Beg. bal. g h. $327,500 $23,000 End. bal. $350,500

Calculation:

Ending balance = $327,500 + $23,000 (underapplied overhead)

= $350,500 (debit balance)

2. Answer -

Adjusted cost of goods sold = $350,500

Calculation:

Here,

Work in process inventory = Direct materials + Direct labor + Applied manufacturing overhead

= $65,300 + $133,700 + $128,500

= $327,500

Here, all work in process inventory at the end of month transfer to finished goods inventory.

So,

Finished goods inventory = Work in process inventory

Finished goods inventory = $327,500

And all finished goods inventory were shipped to customers. That means all finished goods inventory transfer to cost of goods sold account

Therefore,

Unadjusted cost of goods sold = Finished goods inventory

Unadjusted cost of goods sold = $327,500

Now,

Indirect materials = Raw materials used in production - Direct materials

= $72,400 - $65,300

= $7,100

Indirect labor = Total labor wages - Direct labor

= $151,600 - $133,700

= $17,900

So,

Actual manufacturing overhead costs = Indirect materials + Indirect labor + Additional manufacturing overhead costs

= $7,100 + $17,900 + $126,500

= $151,500

Underapplied overhead = Actual manufacturing overhead costs - Applied manufacturing overhead costs

= $151,500 - $128,500

= $23,000

Then,

Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied overhead

= $327,500 + $23,000

= $350,500