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	350	units		@		$	280		=		$	98,000
Material R	135	units		@			250		=			33,750
Paint	90	units		@			100		=			9,000
Total cost											$	140,750

On May 4, the company began working on two technopresses: Job 102 for Worldwide Company and Job 103 for Reuben Company.

1. Purchased raw materials on credit and recorded the following information from receiving reports and invoices.

Receiving Report No. 426, Material M, 280 units at $280 each.
Receiving Report No. 427, Material R, 130 units at $250 each.

Instructions: Record these purchases with a single journal entry. Enter the receiving report information on the materials ledger cards.

2. Requisitioned the following raw materials for production.

Requisition No. 35, for Job 102, 189 units of Material M.
Requisition No. 36, for Job 102, 72 units of Material R.
Requisition No. 37, for Job 103, 98 units of Material M.
Requisition No. 38, for Job 103, 102 units of Material R.
Requisition No. 39, for 17 units of paint.

Instructions: Enter amounts for direct materials requisitions on the materials ledger cards and the job cost sheets. Enter the indirect materials amount on the materials ledger card.

3. Received the following employee time tickets for work in May.

Time tickets Nos. 1 to 10 for direct labor on Job 102, $81,000.
Time tickets Nos. 11 to 30 for direct labor on Job 103, $62,000.
Time tickets Nos. 31 to 36 for equipment repairs, $23,000.

Instructions: Record direct labor from the time tickets on the job cost sheets.

4. Paid cash for the following items during the month: factory payroll, $166,000, and miscellaneous overhead items, $138,000. Use the time tickets to record the total direct and indirect labor costs.
5. Finished Job 102 and transferred it to the warehouse. The company assigns overhead to each job with a predetermined overhead rate equal to 80% of direct labor cost.

Instructions: Enter the allocated overhead on the cost sheet for Job 102, fill in the cost summary section of the cost sheets.

6. Delivered Job 102 and accepted the customer’s promise to pay $460,000 within 30 days.
7. Applied overhead cost to Job 103 based on the job’s direct labor to date.

Required:
Complete the materials ledger cards for Material M, Material R, and paint using the information given in part a and b. Complete the job cost sheets for Jobs 102 and 103 using the information given in part a, b, c and e. Prepare journal entries for part a through g.

Complete this question by entering your answers in the tabs below. Materials Job Cost Requisit... Sheets General Journal Complete the materials ledger cards for Material M, Material R, and paint using the information given in part a and b. MATERIALS LEDGER CARD Item Material M Received Issued Receiving Unit Total Unit Total Date Units Units Report Price Requisition Units Price Price Price May 350 1 #426 280 280 78,400 630 #35 189 280 52,920 #37 98 280 27,440 Balance Unit Total Price Price 280 98,000 280 176,400 280 0 280 0 Item Received Receiving Unit Units Report Price Material R Issued Total Unit Requisition Units Price Price Balance Unit Total Price Price Total Price Date Units May 1 135 250 33,750 #427 130 250 32,500 #36 #38 72 102 8 ܘܘܘܐ 1). 250 250 250 250 18,000 250 25,500 0 Item Received Receiving Unit Units Report Price Paint Issued Total Unit Price Requisition Units Price Balance Unit Total Price Price Total Price Date Units May 1 90 100 9,000 #39 17 100 1,700 100 0 < Materials Requisition Job Cost

Answer 1

1			Materials 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.									350	280	98000
	May 4.	426	280	280	78400					630	280	176400
										(350+280)
						35	189	280	52920	441	280	123480
										(630-189)
						37	98	280	27440	343	280	96040
										(441-98)
			Materials 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.									135	250	33750
	May 4.	427	130	250	32500					265	250	66250
										(135+130)
						36	72	250	18000	193	250	48250
										(265-72)
						38	102	250	25500	91	250	22750
										(193-102)
			Materials 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.									90	100	9000
						39	17	100	1700	73	100	7300
										(90-17)

2 Customer Name: Job cost sheet Worldwide company Job No: 102 Date May 4. Direct materials Direct labor Overhead costs applied Time Requisition ticket number Amount number Amount Date Rate Amount 35 529201 to 10 81000 May 4. 80% 64800 (189*280) (81000*80%) 36 18000 Summary of costs (72*250) $ 70920 Total 81000 Direct Materials 70920 Direct labor 81000 Overhead 64800 Total cost 216720 May 4. Total Job cost sheet Ruben company Customer Name: Job No: 103 Direct materials Overhead costs applied Direct labor Time ticket Requisition

Date May 4. Time Requisition ticket number Amount number 37 27440 11 to 30 (98*280) 38 25500 (102*250) 52940 Total May 4. Amount Date Rate Amount 62000 May 4. 80% 49600 (62000*80%) Summary of costs $ 62000 Direct Materials 529401 Direct labor 62000 Overhead 49600 Total cost 164540 Total 3 Ref. a. Debit Credit 110900 110900 b. 123860 General Journal Raw materials inventory (280*280)+(130*250) Accounts payable (Purchased raw materials on credit) Work in process inventory (70920+52940) Factory overhead (17*100) Raw materials inventory (Materials issued to jobs) Work in process inventory (81000+62000) Factory overhead 1700 125560 C. 143000 23000

C. 143000 23000 166000 d. 166000 138000 304000 e. 2167201 216720 Work in process inventory (81000+62000) Factory overhead Salary and wages payable (Employee time tickets recorded) Salary and wages payable Factory overhead Cash (Factory payroll and misc. overhead paid) Finished goods inventory (Refer 2) Work in process inventory (Job 102 finished and transferred) Accounts receivable Sales revenue (Job 102 delivered to customer) Cost of goods sold (Refer 2) Finished goods inventory (Cost of Job 102 recorded) Work in process inventory (Refer 2) Factory overhead (64800+49600) (Overhead applied to Job 102 & 103) f(1). 460000 460000 f(2). 216720 216720 114400 114400