On September 1, two jobs were in process at Pete’s Patios. Details of the jobs follow:...

On September 1, two jobs were in process at Pete’s Patios. Details of the jobs follow:

Job Number	Direct Materials		Direct Labor
PP-24	$	960	$	372
PP-30		655		1,700

Materials Inventory on September 1 totaled $5,550, and $662 worth of materials was purchased during the month. Indirect materials of $102 were withdrawn from materials inventory. On September 1, finished goods inventory consisted of two jobs, PP-12, costing $2,358, and PP-14, with a cost of $932. Costs for both jobs were transferred to Cost of Services Billed during the month.

Also during September, Jobs PP-24 and PP-30 were completed. Completing Job PP-24 required an additional $1,360 in direct labor. The completion costs for Job PP-30 included $680 in direct materials and $4,300 in direct labor.

Pete’s Patios used a total of $1,962 of direct materials (excluding the $102 indirect materials) during the period, and total direct labor costs during the month amounted to $8,120. Overhead has been estimated at 50 percent of direct labor costs, and this relation has been the same for the past few years.

Required:

Compute the costs to Jobs PP-24 and PP-30 and the balances in the September 30 inventory accounts.

Solutions

Expert Solution

Cost to complete PP-24
Additional Direct Labor	1360
Overhead (Direct labor*50%)	680
Total	2040

Cost to complete PP-30
Additional Direct materials	680
Direct Labor	4300
Overhead (Direct labor*50%)	2150
Total	7130


Material Inventory as of Sept. 30th
Beginning Materials inventory	5550
Add: Purchases	662
Less: Indirect material used	102
Less: Direct material used	1962
Material Inventory	8276


Balance of Work-in-Process as of Sept. 30th
Total Direct materials used during the month	1962
Total direct labor costs during the month	8120
Overhead applied (Labor cost*50%)	4060
Total costs incurred during the month		14142
Less: Cost to complete Job-24 and PP-30:
Job PP-24	2040
Job PP-30	7130
Totals costs to complete		9170
Balance of Work-in-Process Inventory		4972


Balance of Finished Goods Inventory as of Sept. 30th
	Direct Materials	direct labor	Overhead	Total
Beginning Work in process balance of PP-24	960	372	186	1518
Beginning Work in process balance of PP-30	655	1700	850	3205
Cost to complete PP-24				2040
Cost to complete PP-30				7130
Balance of Finished Goods Inventory	13893

ekkarill92 answered 1 year ago

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