Question

Reyes Manufacturing Company uses a job order cost system. At the beginning of January, the company had one job in process (Job 201) and one job completed but not yet sold (Job 200). Job 202 was started during January. Other select account balances follow (ignore any accounts that are not listed).

During January, the company had the following transactions:
(a) Purchased $60,000 worth of materials on account.

(b) Recorded materials issued to production as follows:

Job Number	Total Cost
201	$	10,800
202		20,400
Indirect materials		5,400
	$	36,600

c) Recorded factory payroll costs from direct labor time tickets that revealed the following:

Job Number	Hours	Total Cost
201	115	$	2,400
202	392		10,000
Factory supervision			4,100
		$	16,500

(d) Applied overhead to production at a rate of $28.00 per direct labor hour for 507 actual direct labor hours.
(e) Recorded the following actual manufacturing overhead costs:

Item	Total Cost		Description
Factory rent	$	3,200	Paid in cash
Depreciation		3,300	Factory equipment
Factory utilities		4,200	Incurred but not paid
Factory insurance		2,000	Prepaid policy
	$	12,700

(f) Completed Job 201 and transferred it to Finished Goods Inventory.

(g) Sold Job 200 for $50,800.

Required:
1. Post the preceding transactions to T-accounts. (Note: Capture the offsetting of debits and credits to other accounts such as Cash, Payables, Accumulated Depreciation, and so on in Miscellaneous Accounts.)

	Raw Materials Inventory Work in Process Inventory 1/1 41,000 1/1 22,500 31/1 41,000 31/1 22,500 Finished Goods Inventory Cost of Goods Sold 1/1 22,000 1/1 31/1 22,000 31/1 0 Manufacturing Overhead Sales Revenue 1/1 1/1 31/1 0 31/1 0 Miscellaneous Accounts (Cash, Payables, etc.) 1/1

2. Compute the ending balance in the following accounts:

a.Raw Materials Inventory

b.Work in Process Inventory

c.Finished Goods Inventory

d.Cost of Goods Sold (unadjusted)e.Manufacturing Overhead

3. Compute the total cost of Jobs 201 and 202 at the end of January.

	Job Total Cost Number of Job 201 202

Answer 1

Raw material Inventory
Bal . 1/1	41000	Work in progress	31200
Purchase	60000	anufacturing overheads	5400
	101000		36600
Bal . 1/31	64400
Work in progress inventory
Bal . 1/1	22500	Finished goods	38920
Direct material	31200
Direct labor	12400
Manufacturing overheads	14196
	80296		38920
Bal . 1/31	41376
Finshed goods inventory
Bal . 1/1	22000	Cost of goods sold	22000
Work in progress	38920
	60920		22000
Bal 1/31	38920
Manufacturing overheads
Actual overheads	12700	Work in progress	14196	(28*507)
Material	5400
Labor	4100
	22200		14196
Bal 1/31	8004
Cost of goods sold
Finished goods	22000		38920
Total	22000
Sales revenue
		Sales revenue	50800
Misc. Accounts

2	Work in progress inventory	41376	Job 202
	Finished goods inventory	38920	Job 201
	Cost of goods sold	22000	Job 200
3		Job 201	Job 202
	Beg. Work in progress	22500
	Material	10800	20400
	Labor	2400	10000
	Manufacturing overheads (28$)	3220	10976
	Total manufacturing cost	38920	41376