Question

Jurvin Enterprises is a manufacturing company that had no beginning inventories. A subset of the transactions that it recorded during a recent month is shown below.

1. $76,500 in raw materials were purchased for cash.
2. $71,700 in raw materials were used in production. Of this amount, $66,800 was for direct materials and the remainder was for indirect materials.
3. Total labor wages of $150,800 were incurred and paid. Of this amount, $134,000 was for direct labor and the remainder was for indirect labor.
4. Additional manufacturing overhead costs of $125,500 were incurred and paid.
5. Manufacturing overhead of $120,200 was applied to production using the company’s predetermined overhead rate.
6. All of the jobs in process at the end of the month were completed.
7. All of the completed jobs were shipped to customers.
8. Any underapplied or overapplied overhead for the period was closed to Cost of Goods Sold.

Required:

1. Post the above transactions to T-accounts.
2. Determine the adjusted cost of goods sold for the period.

Post the above transactions to T-accounts.

	Cash Raw Materials Beg. Bal. Beg. Bal. End. Bal. End. Bal. Work in Process Finished Goods Beg. Bal. Beg. Bal. End. Bal. End. Bal. Manufacturing Overhead Cost of Goods Sold Beg. Bal. Beg. Bal. End. Bal. End. Bal.

• Determine the adjusted cost of goods sold for the period.

  	Adjusted cost of goods sold

Answer 1

Solution:

here

a i = raw materials purchased

b = raw materials used in production

c = total labour wages paid

d = manufacturing overhead cost

e = manufacturing overhead was applied to production

f = jobs in process were completed

g = completed jobs shipped to customers

h = under applied or over applied overhead closed to cost of goods sold

Cash

Beg. Bal.
		76,500	a
		150,800	c
		125,500	d
End Bal.		352,800 (76500+150800+125500)

Raw Materials

Beg. Bal.
a	76,500	71,700	b
End. Bal.	4,800 (71,700-76,500)

Work in process

Beg. Bal.
b	66,800	321,000 (66800+134000+120200)	f
c	134,000
e	120,200
End. Bal.

Finished goods

Beg. Bal.
f	321,000	321,000	g
End. Bal.

Manufacturing overhead

Beg. Bal.
b	4,900 (71700-66800)	120,200	e
c	16,800	27,000 (4900+16800+125500-120200)	h
d	125,500
End. Bal.

Cost of goods sold

Beg. Bal.
g	321,000
h	27,000
End .Bal.	348,000 (321000+27000)

2. Adjusted cost of goods sold = $348,000