Question

Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations:

	a. Materials purchased on account, $31,030.
	b. Materials requisitioned and factory labor used:

Job	Materials	Factory Labor
301	$3,060	$2,710
302	3,640	3,820
303	2,430	1,870
304	8,280	7,010
305	5,340	5,100
306	3,790	3,170
For general factory use	1,060	4,260

	c. Factory overhead costs incurred on account, $5,290.
	d. Depreciation of machinery and equipment, $1,960.
	e. The factory overhead rate is $52 per machine hour. Machine hours used:

Job	Machine Hours
301	23
302	37
303	29
304	70
305	40
306	23
Total	222

	f. Jobs completed: 301, 302, 303 and 305.
	g. Jobs were shipped and customers were billed as follows: Job 301, $8,430; Job 302, $10,960; Job 303, $15,550.

	Required:
1.	Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on March 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles.
2.	Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. For grading purposes enter transactions in alphabetical order. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank.
3.	Prepare a schedule of unfinished jobs to support the balance in the work in process account.*
4.	Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.* *Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries.

Answer 1

1.

No.	Account Titles and Explanations	Debit	Credit
a.	Materials	31030
	Accounts payable		31030
	(Materials purchased on account)
b.	Work in process	50220
	Factory overhead (1060 + 4260)	5320
	Materials		27600
	Factory labor		27940
	(Materials requisitioned and factory labor used)
c.	Factory overhead	5290
	Accounts payable		5290
	(Factory overhead incurred on account)
d.	Factory overhead	1960
	Accumulated depreciation-machinery and equipment		1960
	(Depreciation on machinery and equipment)
e.	Work in process	11544
	Factory overhead ($52 x 222)		11544
	(Factory overhead applied)
f.	Finished goods	34678
	Work in process		34678
	(Jobs completed and transferred)
g.(1)	Accounts receivable	34940
	Sales revenue		34940
	(Jobs shipped)
g.(2)	Cost of goods sold	22158
	Finished goods		22158
	(Cost of jobs sold)

Note: Please confirm exact wording of account titles with the chart of accounts since the same is not provided with the question.

2.

Work in Process
	Debit	Credit
b.	50220	34678	f.
e.	11544
End. Bal.	27086
Finished Goods
	Debit	Credit
f.	34678	22158	g.
End. Bal.	12520

3.

Schedule of Unfinished Jobs
Job 304			18930
Job 306			8156
Total $			27086

4.

Schedule of Completed Jobs on Hand
Job 305			12520
Total $			12520

Note: No list of Amount Descriptions has been provided with the question. Kindly fill appropriately.

Calculations:

	Jobs
	301	302	303	304	305	306	Total
Materials	3060	3640	2430	8280	5340	3790	26540
Factory labor	2710	3820	1870	7010	5100	3170	23680
Factory overheads	1196	1924	1508	3640	2080	1196	11544
Total cost $	6966	9384	5808	18930	12520	8156	61764