Question

Old School Publishing Inc. began printing operations on January 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, $7,600 of indirect materials and $12,100 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
Direct materials	$10,600
Direct labor	8,300
Factory overhead	6,557
Total	$25,457

Job 302
Direct materials	$21,900
Direct labor	15,000
Factory overhead	11,850
Total	$48,750

Job 303
Direct materials	$23,200
Direct labor	19,000
Factory overhead	—

Job 304
Direct materials	$15,500
Direct labor	11,100
Factory overhead	—

Required:

Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles. A. Direct and indirect materials used. B. Direct and indirect labor used. C. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). D. Completion of Jobs 301 and 302.

Answer 1

	Account Titles and Explaination	Debit	Credit
A.	Work - in process inventory	$ 71,200
	Factor overhead	$   7,600
	Raw materials inventory		$ 78,800
B.	Work - in process inventory	$ 53,400
	Factor overhead	$ 12,100
	Factory wages payable		$ 65,500
C.	Work - in process inventory ($53,400 X 79%)	$ 42,186
	Factor overhead		$ 42,186
	`
D.	Finished goods inventory ($25,457 + $48,750)	$ 74,207
	Work - in process inventory		$ 74,207
	Workings:
		Job 301	Job 302	Job 303	Job 304	Total
	Direct material	$ 10,600	$ 21,900	$       23,200	$       15,500	$ 71,200
	Direct labor	$   8,300	$ 15,000	$       19,000	$       11,100	$ 53,400
	Factor overhead	$   6,557	$ 11,850	$                -	$                -
	Total	$ 25,457	$ 48,750	$       42,200	$       26,600
	Overhead rate (Factory overhead / Direct labor)	79%	79%