Question

Problem 02-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3

[The following information applies to the questions displayed below.]

Widmer Watercraft’s predetermined overhead rate is 200% of direct labor. Information on the company’s production activities during May follows.

1. Purchased raw materials on credit, $220,000.
2. Materials requisitions record use of the following materials for the month.

Job 136	$	49,000
Job 137		32,000
Job 138		19,800
Job 139		22,600
Job 140		6,600
Total direct materials		130,000
Indirect materials		20,000
Total materials used	$	150,000

3. Paid $15,500 cash to a computer consultant to reprogram factory equipment.
4. Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$	12,200
Job 137		10,600
Job 138		37,900
Job 139		39,200
Job 140		3,400
Total direct labor		103,300
Indirect labor		26,000
Total	$	129,300

5. Applied overhead to Jobs 136, 138, and 139.
6. Transferred Jobs 136, 138, and 139 to Finished Goods.
7. Sold Jobs 136 and 138 on credit at a total price of $540,000.
8. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building	$	69,500
Depreciation of factory equipment		38,000
Expired factory insurance		10,000
Accrued property taxes payable		35,500

9. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Problem 02-3A Part 1

Required:
1. Prepare a job cost sheet for each job worked on during the month.

Answer 1

1
	Job No. 136	Job No. 137	Job No. 138	Job No. 139	Job No. 140
Materials	49000	32000	19800	22600	6600
Labor	12200	10600	37900	39200	3400
Overhead	24400	21200	75800	78400	6800
Total cost	85600	63800	133500	140200	16800