Question

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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 7,000 8,000 5,600 8 8,000 9,000 7,200 12 25 2,900 27 4,000 21,000 3,200 16,000 17,900 Cost of completed job: Direct materials Direct labor Manufacturing overhead Total cost Unit cost ($54,900 - 2,000) $17,900 21,000 16,000 $54,900 $27.45 (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?

Answer 1

1. Balance in WIP in January 1 = $54900

Manufacturing overhead rate = 76.19%

Manufacturing overhead Rate = Overhead*100/Direct labor Manufacturing overhead Rate =16000*100/21000 76.19

Note Last years data is not available

Jan. 31 Jan. 31 Journal entries Account title and explanation Debit Credit Work in Process Inventory 17900 Rawmaterial 17900 (Usage of materials for job) Work in Process Inventory 21000 Direct Labor 21000 (Labor cost incurred for production) Work in process Inventory 16000 Manufacturing Overhead 16000 ( manufacturing Overhead allocated for production) Finished Goods Inventory 54900 Work in Process Inventory 54900 (Completed job transferred to Finished goods inventory) Jan. 31 Jan. 31