Question

Required information

Problem 15-3A 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 for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows.

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a. Purchased raw materials on credit, $200,000.

b. Materials requisitions record use of the following materials for the month.

Job 136	$	49,500
Job 137		32,500
Job 138		19,200
Job 139		22,800
Job 140		6,400
Total direct materials		130,400
Indirect materials		21,500
Total materials used	$	151,900

c. Paid $15,250 cash to a computer consultant to reprogram factory equipment.

d. Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$	12,000
Job 137		10,600
Job 138		38,100
Job 139		39,400
Job 140		3,400
Total direct labor		103,500
Indirect labor		24,500
Total	$	128,000

e. Applied overhead to Jobs 136, 138, and 139.

f. Transferred Jobs 136, 138, and 139 to Finished Goods.

g. Sold Jobs 136 and 138 on credit at a total price of $545,000.

h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building	$	68,500
Depreciation of factory equipment		38,000
Expired factory insurance		11,000
Accrued property taxes payable		36,500

i. 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.

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Problem 15-3A Part 4

4. Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Work in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold.

	Report of Job Costs Work in Process Inventory Balance Finished Goods Inventory Balance Cost of Goods Sold Balance

Answer 1

Answer 4.
Finished goods					WIP
Beg. Bal	-				Beg. Bal	-
WIP	360,000	219,000	Cost of Goods Sold		Direct Materials	130,400	360,000	Finished Goods Inventory
					Factory Labor	103,500
End. Bal.	141,000				Factory Overhead	200,200
					End. Bal.	74,100

Work-in-Process, Ending:
	137	140	Total
Direct Material	32,500	6,400	38,900
Factory Labor	10,600	3,400	14,000
Factory Overhead -200%	21,200	6,800	21,200
Total	64,300	16,600	74,100
Finished Good Inventory, Ending
	139
Direct Material	22,800
Factory Labor	39,400
Factory Overhead -200%	78,800
Total	141,000
Cost of Goods Sold:
	136	138	Total
Direct Material	49,500	19,200	68,700
Factory Labor	12,000	38,100	50,100
Factory Overhead -200%	24,000	76,200	100,200
Total	85,500	133,500	219,000