In: Accounting
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$102 were withdrawn from materials inventory.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.
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 |