Question

Entries for Factory Costs and Jobs Completed

Collegiate Publishing Inc. began printing operations on March 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $1,710 of indirect materials and $20,710 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:

Job 301  Job 302

Direct materials$17,710  Direct materials$8,280

Direct labor6,800  Direct labor3,500

Factory overhead3,740  Factory overhead1,925

Total$28,250  Total$13,705

      

Job 303  Job 304

Direct materials$22,740  Direct materials$5,100

Direct labor7,500  Direct labor1,000

Factory overhead—  Factory overhead—

Journalize the summary entry to record each of the following operations for March (one entry for each operation):

a. Direct and indirect materials used. If an amount box does not require an entry, leave it blank.

  

b. Direct and indirect labor used. If an amount box does not require an entry, leave it blank.

  

c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). If an amount box does not require an entry, leave it blank.

  

d. Completion of Jobs 301 and 302. If an amount box does not require an entry, leave it blank.

  

Answer 1

OH rate as % of DLC:
Total Overheads applied to Two jobs (3740+1925)	5665
Divide: Total Labour cost (6800+3500)		10300
OH rate as % of DLC:				55%
Job Cost sheet
			301	302	303	304	Total
Cost incurred:
Direct material used		17710	8280	22740	5100	53830
Direct Labour used		6800	3500	7500	1000	18800
factory Overheads @55% of DLC	3740	1925	4125	550	10340
Total cost of Jobs		28250	13705	34365	6650	82970
Journal entries:
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Work in process inventory		53830
	Factory overheads			1710
	Raw material inventory			55540
	(for material used)
b.	Work in process inventory		18800
	Factory overheads			20710
	Wages payable				39510
	(for labour cost incurred)
c.	Work in process inventory		10340
	Factory overheads			10340
	(for overheads applied)
d.	Finished goods inventory		41955
	Work in process inventory	(28250+13705)	41955
	(for jobs completed)