Question

Job Cost Flows, Journal Entries On April 1, Sangvikar Company had the following balances in its inventory accounts: Materials Inventory $12,720 Work-in-Process Inventory 21,320 Finished Goods Inventory 8,800 Work-in-process inventory is made up of three jobs with the following costs: Job 114 Job 115 Job 116 Direct materials $2,774 $2,640 $3,650 Direct labor 1,800 1,560 4,300 Applied overhead 1,080 936 2,580 During April, Sangvikar experienced the transactions listed below. a. Materials purchased on account, $30,000. b. Materials requisitioned: Job 114, $16,500; Job 115, $12,400; and Job 116, $5,000. C. Job tickets were collected and summarized: Job 114, 150 hours at $12 per hour; Job 115, 220 hours at $16 per hour; and Job 116, 80 hours at $18 per hour. d. Overhead is applied on the basis of direct labor cost. e. Actual overhead was $4,363. f. Job 115 was completed and transferred to the finished goods warehouse. g. (1) Job 115 was shipped, and (2) the customer was billed for 125 percent of the cost. Required: 1. Prepare journal entries for the April transactions. a. Materials Accounts Payable b. Work in Process Materials Work in Process C. o

Answer 1

1. Predetermined overheadrate= Applied overhead/Direct labor cost Predetermined overheadrate = $4,596 (1,080+936+2,580)/$7,660 (1,800+1,560+4,300) Predetermined overhead rate=60% Credit Debit $30,000 $30,000 $33,900 $33,900 с $6,760 $6,760 $4,056 Date Particulars a Materials Accounts payable b Work in process ($16,500+12,400+5,000) Materials Work in process ($1800+3,520+1,440) Wages payable d Work in process ($6,760*60%) Overhead control Overhead control Various accounts f Finished goods Work in process g Cost of goods sold Finished goods Accounts receivable ($23,168*125%) Sales revenue $4,056 e $4,363 $4,363 $23,168 $23,168 $23,168 $23,168 $28,960 $28,960 Job 115 = Direct material+ Direct labor+ Applied overhead Job 115=$15,040 ($2,640+12,400)+5,080 (1,560+3,520)+3,048 (5,080*60%)= $23.168

2. Beg Bal. a $33,900 End. Bal. Beg. Bal jb $23,168 Material $12,720 30,000 $8,820 Work In Process $21,320 $33,900 $6,760 $4,056 $42,868 Finished Goods $8,800 $23,168 $8,800 C d End. Bal. Beg Bal. f $23,168 8 End. Bal.
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